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Chủ Nhật, 7 tháng 12, 2014

Costly Care at Hospital Practices

The bigger the system, the bigger the bill.

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  • by J. Duncan Moore, Jr. Contributing Writer, MedPage Today

Action Points

Patients in physician practices owned by large hospitals and multihospital delivery systems had higher expenditures for care than patients in practices owned by the physicians themselves, a new study has found.
Expenses for hospital-owned physician practices were 10.3% higher than physician-owned practices, and those for multihospital system-owned practices were 19.8% higher in the period 2009-2012, according to the article in JAMA by James C. Robinson, PhD, MPH, a professor of economics at the University of California-Berkeley, and Kelly Miller, a program analyst at the Integrated Healthcare Association.
In real dollars, those percentage differences translate to mean expenditures of $3,066 per patient in physician-led organizations, $4,312 per patient in hospital-led organizations, and $4,776 per patient in multihospital-led organizations for the year 2012.
"These are enormous differences," said Paul B. Ginsburg, PhD, a University of Southern California health economist who is based in Washington, D.C. "A lot of physicians would look at these results and say, 'I told you so.'"
The goal of the effort was to examine the effects of consolidation among medical providers. Researchers have wondered whether the proliferating mergers and acquisitions among hospitals and physician groups will truly lead to more cooperation and thus lower expenses, as has been advertised, or whether greater hospital negotiating power against insurers would result in higher utilization of services and higher prices, and thus more expense. The question is important for policymakers because the Affordable Care Act effectively encourages physicians to join accountable care organizations (ACOs), many of which are dominated by large hospital groups.
Even though no one should be surprised by the results, this is nonetheless the first time that someone has crunched the numbers, analyzed the data, and delivered such a strong, clear statement of what is really happening, Ginsburg said. "That's why it's a very important study."
Robinson and Miller looked at medical expenditures on behalf of 4.5 million patients insured through commercial HMOs in California over 4 years. People covered by Medicare, Medicaid, or commercial PPOs were not included.
The outcome metric was how much was spent per patient per year, based on what insurers paid to physician organizations for professional services, to hospitals for inpatient and outpatient care, to clinical laboratories for diagnostic tests, and to drug makers for prescription medications. The costs per patient were then adjusted for patient illness burden, geographic input costs, and organizational characteristics.
It's not clear that consolidation has led organizations to become more efficient. "There is a possibility for it," said David M. Cutler, PhD, a professor of economics at Harvard, author of an accompanying editorial in JAMA. It may be more important to keep in mind that clinical integration is a good thing. "That means that when you get physicians and hospitals working together and appropriately coordinating with post-acute care and all that, you can really improve the quality of care. Really good organizations are clinically pretty consolidated." A hospital that owns physician practices may coordinate discharges more appropriately, leading to shorter lengths of stay, even as it charges more for each admission, he said in his article.
But, Cutler added in an interview with MedPage Today, clinical integration should be distinguished from corporate integration. "You can be not corporately integrated and have a very good clinical integration. Or you can be corporately integrated and have not-so-good clinical integration." The focus on corporate integration "is distracting from what we know is effective, which is clinical integration."
Another study in Health Affairs published last summer found that physician practices with one or two practitioners had lower rates of preventable hospital admissions than practices with 10 to 19 physicians.
Robinson, in his article, is careful not to ascribe a cause to his findings. He notes that the study doesn't distinguish how much of the expense differential is owing to higher unit prices and how much to utlization or number of procedures. It very well may be that "organizations owned by local hospitals and multihospital systems may better coordinate care than organizations owned by their participating physicians," he wrote. "For the hospital-owned organizations represented in this study, however, any resulting improvements in coordination were not associated with lower expenditures per patient. ... The findings are not encouraging for proponents of integration."
"It's probably because the price is higher, they charged more for care," Cutler said. "That's a very sobering finding."
It's also important to remember that these results were obtained under the traditional payment system, before the reimbursement reforms and incentive changes in the Affordable Care Act came into effect, Cutler pointed out. The payment reforms introduced in the ACA, such as ACOs, bundled payments, patient-centered medical homes, and penalties for poor-quality care or readmissions to hospitals, should, in principle, disincentivize providers from utilizing more resources than necessary or raising prices too high. "We don't know what the outcome would be if you did this under different kinds of incentives," Cutler said. He is optimistic that the ACA reimbursement reforms will have the desired effect.
In an interview with MedPage Today, Ginsburg said some, but not all, of the conclusions of the California study might be applicable to the rest of the country. With regard to management of medical practices, California has been something of a place apart since the 1990s. "What is unique about California is the degree to which physician organizations have this experience of contracting with insurers under incentives to limit utilization," he said. In some cases California physicians are taking risk not only for professional services (not including hospital care) but managed-care organizations have delegated to them certain functions such as utilization management and physician credentialing.
It is unfortunate that the Robinson study could not sort out price from utilization, Ginsburg said. This is relevant because CMS has been trying to make it feasible for physician-led ACOs to contract with Medicare. In an ACO environment, the physician-led organizations have very clear incentives. "If they can reduce hospitalizations, avoid readmissions, reduce emergency room use, they will succeed in this context," he said. "However, if you look at a hospital ACO they are conflicted. A lot of the success I mentioned before is going to result in less business for hospitals."
Given the massive forces pushing toward consolidation, physicians naturally wonder whether their practices can be viable on their own. Many physicians prefer to practice in an organization that is owned and managed by doctors, rather than by a big hospital. "It's the lack of capital and lack of scale, often, that prevents physician practices from performing well financially for their owners," Ginsburg said.
CMS is aware of the conflict between hospital-led and physician-led ACOs, and would like to help independent physician practices remain viable and apart from hospitals. Ginsburg published an article in Health Affairs last May in which he discussed various incentives and pricing strategies to preserve physician independence. The challenge, Ginsburg wrote, is to "maximize the positive benefits of clinical integration while minimizing the negative effects of consolidation."
For doctors in private practice the era of simply raising prices "is probably coming to an end," Cutler said. "Increasingly, what the system is going to reward is doing better, not just doing more. That could be a real benefit for the physician community, if you don't have to make things go by always thinking what's going to reimburse well. Instead, you can be thinking, 'What's the right thing for patients?' and that will translate into a good practice."
Physicians also need to remember that integrating their practice clinically is not the same thing as integrating corporately.
"The most obvious things now are: reducing error rates, infection rates, readmission rates," Cutler said. "Quality and safety is the easiest entrée into better care -- cheaper, better, more rewarding care."
Robinson and Miller did not report any conflicts of interest.
Cutler reported receiving fees and nonfinancial support from a wide assortment of provider organizations, consultants, governments, payers, and universities.
  • Reviewed by Zalman S. Agus, MD Emeritus Professor, Perelman School of Medicine at the University of Pennsylvania and Dorothy Caputo, MA, BSN, RN, Nurse Planner
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