Physician employment ups costs

Physician integration into hospitals as large providers continue to acquire practices could be driving up costs, the opposite effect of what was touted from such arrangements, according to the results of a poll conducted by the American College of Physician Executives (ACPE).

Some respondents to the poll were quick to point out, however, that the cost increases may only be temporary.

The poll was sent to ACPE’s 11,000 members and garnered 459 responses, according to an ACPE press release. A total of 32 percent said overall costs rose after a hospital or health system bought their group or practice, while 16 percent said costs stayed the same and only 5 percent said costs decreased. The rest were unsure or were not in an applicable situation.

The results come after a recent Medicare Payment Advisory Commission report showing the same clinical services cost more when performed as an outpatient procedure at a hospital than at a doctor’s office.

As value-based care replaces the current volume-based reimbursement model, hospital employment of physicians may wind up being the most cost-effective option, according to some respondents. “Once the payment mechanism is turned around to measuring outcomes and payment is not based on doing more equals earning more, then the answer you get might be different,” said Kathryn Stewart, MD.

Aside from cost considerations, the responses also pointed to other benefits of physician integration.

“Our costs and charges are indeed higher with physician employment than without,” said respondent David McDermott, MD, the director of emergency services at Mayo Regional Hospital in Dover-Foxcroft, Maine. “However, in rural Maine, if there was not hospital employment of physicians, the physicians would not be here. Costs have risen but we now have access.”