Integrate or separate: a debate among medical researchers on the implications of hospital-physician integration
The trademark environment of family doctor’s offices, with art on the walls and a lollipop at the check-in desk, may soon be a thing of the past. That’s because hospitals are acquiring them and directly employing their doctors. Between 2019 and 2022, the number of physicians employed by hospitals and corporations in the United States grew by 19%, and as of January 2022, almost three-quarters of physicians were employed by hospitals or corporations. This phenomenon is called hospital-physician integration.
“Probably, in the long run [this] might be leading to the … solo practice doctor becoming an endangered or extinct species,” says Brady Post, a health economist and health services researcher and assistant professor in Northeastern’s Bouvé College of Health Science. Amid a lively debate among doctors, hospitals, researchers and public health professionals about the pros and cons of healthcare consolidation, Post is using large datasets of Medicare claims and other econometrics to understand exactly who it benefits.
“Hospitals used to be seen as … a place where physicians did the more intensive services they could not do in an office. But [they were] fundamentally a separate organization,” says Post. “The overall message from this research and from the work of other scholars in the field is to be appropriately skeptical of healthcare consolidation in the United States.”
At first, many parties were optimistic about hospital-physician integration, says Post. For hospitals, having their own physicians ensures referrals stay in-house and gives them one platform to better coordinate patient care.
For physicians, it can take away some of the pressures and costs of running a private practice in the context of “complex and changing regulations,” says Post. Generally, “most physicians have more interest in practicing medicine than practicing the business of medicine.”
Some physicians have also made arguments for the benefit to patients themselves with higher quality care. But according to Post, there isn’t much evidence supporting those claims.
In his 2022 study, published in Health Economics, Post digs deeper into understanding how hospital integration might influence subtle but significant dynamics related to patients, providers and the business side of hospitals. The study showed that as integration rises, so does the “coded severity” of patient health — a term for how a physician reports the intensity of a patient’s condition to insurance companies using a numerical index.
Using Medicare claims filed between 2010 and 2015 from both independent and hospital-integrated physicians throughout the United States, he and his co-authors found that over a six-year period, there was a statistically significant increase of between 2% and 4% in patient-coded severity of illness.
The paper explains that the increase in coded severity attributable to integration was comparable to the increase in coded severity that would occur if, overnight, a patient aged by about six months. That’s another way of saying that the patients were coded as if their condition were worse than it was.
While the study did not find a one-to-one relationship between the increase in coded severity indices and healthcare spending, health insurance companies often use such indices to compensate providers for treating sicker patients.
“For the most part, reimbursement is based on what providers reported,” says Post. “So, the hospital tells Medicare just how sick this patient was and Medicare pays accordingly.”
These findings suggest that increasing coded severity could be of financial benefit to the hospital.
While Post’s study doesn’t look at the financial impacts of “upcoding” on patients, a 2021 study published in the Journal of Health and Economics found a 3%-5% increase in hospital prices.
Post worries that if hospitals receive more money when they upcode, there’s an incentive for physicians to continue doing so, even if it isn’t improving patient health. There is “some auditing in place to confirm that kind of severity,” says Post, “but there’s a chance that we may need to apply more scrutiny when we’re talking about large integrated systems.”
He also wants to understand how upcoding affects patient care. “It’s one thing if integration affects the cost of your treatment. It’s another if integration changes the type of treatment you get. That is, are we all destined to get higher-intensity and hospital-based treatment recommendations going forward?”
In his most recent study published in Health Affairs in May 2023, Post and his team looked for patients who were newly diagnosed with stable angina — chest pain caused by coronary heart disease — in Medicare claims data from 2013 to 2020. They found that patients working with integrated cardiologists were more likely to receive “high-intensity, hospital-based” treatments despite clinical guidelines suggesting cardiologists perform cardiac stress tests before making such determinations.
“The primary concern from our study is that patients might be subjected to excessive risk simply because of who employs their doctor,” says Post.
The study sheds light onto the impact of integration on the delivery of healthcare for one particular patient population. But Post is aware that it might affect people with different medical conditions differently.
“It’s worth it to search for those success stories and evaluate how providers might replicate that success elsewhere,” says Post. And without having a broad understanding of impacts, setting up legal limitations on coded severity is not yet practical. Using a grant from the Agency for Healthcare Research and Quality, Post will continue to study hospital-physician integration in the rural context, specifically.
“Rural communities already face major challenges in access and care quality,” says Post. “It is worth evaluating whether hospital-physician integration can be adapted to the rural context to mitigate urban-rural disparities.”
Story from the Science Media Lab.
Last Updated on May 1, 2024