- Between July 2015 and July 2016, hospitals acquired 5,000 physician practices and employed 14,000 physicians, according to research Avalere conducted for the Physician Advocacy Institute.
- The latest findings update a four-year study showing a 100% increase in hospital-owned physician practices and a 63% increase in physicians employed by hospitals between July 2012 and July 2016.
- The report concluded that physicians struggle to maintain independent practices in the face of payer policies that "increasingly favor integrated health systems."
The increase in hospital-owned practices and hospital employment of physicians has been sustained in recent years across every region in the U.S., with the highest rates in the Midwest and the lowest in the South.
Across the country, the number of hospital-employed physicians increased by nearly 11% from July 2015 to July 2016, according to the report.
When physicians move to hospital employment, they are more likely to perform services in a hospital outpatient setting, which increases costs for Medicare and for patients, Avalere said.
The Medicare data researchers used showed increased costs for cardiac imaging, colonoscopy and evaluation and management services when patients receive them in a hospital outpatient department.
Physician Advocacy Institute CEO Robert Seligson put the blame for higher costs squarely on payers. "Payment policies mandated by insurers and government heavily favor large health systems, creating a competitive advantage that stacks the deck against independent physicians, who are already struggling to survive under expensive, time-consuming administrative and regulatory burdens," he said in a press release.
Payers are pushing for more outpatient care, sometimes aggressively. Anthem has implemented a number of policies in the past year that providers have condemned, including limits to the use of anesthesiologists during cataract surgery and no longer paying for MRIs and CT scans performed at hospitals on an outpatient basis.
But physicians themselves can struggle to focus on cost-cutting that doesn't compromise care quality. A recent analysis of the Choosing Wisely campaign, which aims to reduce low-value care, found the program’s efforts did not change physician behavior.
The board of the nonprofit PAI includes officials from state medical associations. The group says it promotes "fair and transparent payment policies" and trends "as part of an ongoing effort to better understand how physician employment and healthcare consolidation affects the practice of medicine and impacts patients."