Onerous versus Ownership

In 2008, 16.3% of physicians worked for hospitals or practices owned by hospitals. In 2012, 28.6% did. Why the sudden growth in hospital ownership of medical practices? In an era of increasing documentation requirements, overhead costs, and scale, many practices find themselves consolidating to survive. Meanwhile, hospitals build primary care networks to broaden their referral bases and respond to government incentives for integration. 

In theory, integration with large hospital networks should make it easier for practices to buy health information technology (HIT) and implement the large-scale care management (CMP) and quality improvement (QI) processes that are becoming an increasingly greater part of reimbursement in the MACRA era. An article in Medical Care Research and Review assesses whether a change in practice ownership affects quality metrics or spending, and whether that relationship is mediated by changes in HIT, CMP, and QI.

Forty of the 565 practices moved to hospital ownership in the 2009-2012 study period and 92 of the 565 moved to a larger size category. These practices had no statistically significant differences in Medicare spending, unplanned 30-day readmissions, or ambulatory care sensitive admissions (ASCAs). Fifty-three percent of the growing and newly-hospital owned practices increased HIT use—as did 53% of the overall sample. Use of CMPs and QI processes increased similarly across the sample, although growing or newly-hospital-owned practices were more likely to report using Plan-Do-Study-Act cycles and other QI processes. Although increased use of CMPs, HIT, and QI processes did not predict Medicare spending or 30-day readmissions, increased CMP use was associated with fewer ASCAs.

In conclusion, more practices are growing and being incorporated into hospital networks, but that change likely has little effect on overall health care spending or quality metrics. These consolidated practices may be better at implementing QI processes, but payment reforms appear to have ensured that all types of practices are increasing HIT implementation. Consolidation and hospital ownership may be the future, but quality and cost will always remain key issues with which all physician practices must contend.

Abstract

Physician practices have been growing in size, and becoming more commonly owned by hospitals, over time. We use survey data on physician practices surveyed at two points in time, linked to Medicare claims data, to investigate whether changes in practice size or ownership are associated with changes in the use of care management, health information technology (HIT), or quality improvement processes. We find that practice growth and becoming hospital-owned are associated with adoption of more quality improvement processes, but not with care management or HIT. We then investigate whether growth or becoming hospital-owned are associated with changes in Medicare spending, 30-day readmission rates, or ambulatory care sensitive admission rates. We find little evidence for associations with practice size and ownership, but the use of care management practices is associated with lower rates of ambulatory care sensitive admissions.

PMID: 30465626

Baker LC, et al. Med Care Res Rev. 2018 Nov 22: epub.