Study: Physician Employment Improves Coordination But Could Lead to Increased Healthcare Costs

A recent study performed by the Center for Studying Health System Change examined healthcare delivery in the Greenville-Spartanburg, S.C.-metropolitan area, a market already notable for high rates of physician employment.

As part of the study, researchers interviewed more than 45 healthcare leaders, including representatives of major hospital systems, such as Greenville Hospital System University Medical Center and Spartanburg Regional, as well as representatives from physician groups, insurers, employers and others.

The study found that while the hospital systems predict improvements in care coordination, quality and safety as a result of physician employment, others are concerned that increased hospital-physician alignment may give the systems greater leverage to negotiate higher payment rates from health plans, resulting in higher healthcare costs.

Other findings of the study include:

  • Even as the hospital systems seek to expand and employ more physicians, they are juggling pressures created by the economic downturn, more uninsured patients and population growth.
  • Although BlueCross BlueShield of South Carolina dominates the commercial insurance market, they and other insurers reportedly are losing leverage in payment rate negotiations given the high degree of hospital-physician consolidation.
  • In response to high rates of emergency department use by uninsured and Medicaid patients, new initiatives are attempting to increase the integration and coordination of care for Medicaid and uninsured patients, even as the state faces a significant Medicaid budget shortfall.
Read the full report, "Greenville & Spartanburg: Surging Hospital Employment of Physicians Poses Opportunities and Challenges."

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