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ACPE Poll Finds Physician Integration May Increase Costs

As hospitals began acquiring physician’s practices, many believed that integrating physicians under one roof would reduce costs by increasing efficiency and streamlining patient care. But a new online poll conducted by the () shows the move toward may be actually driving up costs.

The findings echo results of a recent report by the that shows the same clinical services cost more when performed as an outpatient procedure at a hospital instead of a doctor’s office.

The ACPE poll was sent to the College’s 11,000 members and drew 459 responses. Of those who said the question was applicable to their organization, most (32 percent) said costs went up after a hospital or health system bought a group or practice. About 16 percent said costs remained the same, while only 5 percent said costs decreased. Another 12 percent were unsure, while the remainder said the situation wasn’t applicable.

However, comments left by many respondents showed the situation wasn’t as clear as the Medicare advisory panel’s report indicated. While costs may increase, integration can bring other benefits.

“Our costs and charges are indeed higher with physician employment than without,” said David McDermott, MD, the director of emergency services at Mayo Regional Hospital in Dover-Foxcroft, ME. “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.”

Several participants said the cost increase is temporary and will change once health care switches from a volume-based reimbursement model to one focused on value and quality of care.

“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.

Peter Angood, MD, ACPE’s CEO, said the poll results bring attention to the complexities surrounding physician integration, a topic that is of growing importance to all physicians.

“The increasing trend to physician employment and related efforts towards successful physician integration are issues that affect many physicians at ACPE,” Angood said. “Understanding the long-term consequences of these trends is important not only to physician leaders but also to the future of health care as a whole.”


American College of Physician Executives (ACPE)