Hospital-owned physician practices spent up to 20 percent more per patient annually than physician-owned groups in California, according to a JAMA study.
The study was conducted by James Robinson, PhD, a professor of health economics at the University of California Berkely's School of Public Health, and Kelly Miller, a program analyst at the Integrated Healthcare Association in Oakland, Calif. They analyzed data on total expenditures per patient annually (adjusted for patient illness burden, geographic input costs and organizational characteristics) for 118 physician-owned practices, 19 physician groups owned by local hospitals and 21 practices owned by multihospital systems — all in California — between 2009 and 2012. They found local hospital-owned physician groups spent 10.3 percent more per patient than physician-owned organizations. The difference was even greater for multihospital-owned practices, which spent 19.8 percent more per patient than their physician-owned counterparts.
"From the perspective of the insurers and patients, between 2009 and 2012, hospital-owned physician organizations in California incurred higher expenditures for commercial HMO enrollees for professional, hospital, laboratory, pharmaceutical and ancillary services than physician-owned organizations," the study states. "Although organizational consolidation may increase some forms of care coordination, it may be associated with higher total expenditures."
The California Hospital Association has defended hospital-physician consolidation as necessary to make care delivery more efficient and align fiscal incentives, according to the Los Angeles Times.
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