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Hospital employment of physicians continues to rise rapidly around the country, but the trend could drive up costs at least in the short term, according to a report from the Center for Studying Health System Change.
Physicians employed by hospitals are often paid based on their productivity, which offers an incentive to increase the volume of services. And in some cases, physicians are under pressure from their hospitals to order more expensive tests, according to the report.
The researchers from the Center for Studying Health System Change based their analysis on interviews with nearly 550 physicians, hospital executives, health plan officials, and others, in 12 nationally representative metropolitan communities: Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey, Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y.
"The acceleration in hospital employment of physicians risks raising costs and not improving quality of care unless payment reforms shift provider incentives away from volume toward higher quality and efficiency," said Dr. Ann S. O’Malley of the Center for Studying Health System Change and a coauthor of the study.
The trend toward hospitals’ employing more physicians can also drive up costs because hospitals are able to charge hospital facility fees for office visits and procedures, even when those services are administered in a physician’s office. That means that Medicare – and in some cases private insurers – are paying significantly more for the same services simply because the physician is employed by the hospital.
Hospital employment of physicians does have the potential to improve quality through better integration of care and communication between physicians. The problem, the researchers noted, is that integration and communication can be slow to improve just because physicians get their paychecks from the hospital.
The research was funded by the Robert Wood Johnson Foundation and the National Institute for Health Care Reform.
Hospital employment of physicians continues to rise rapidly around the country, but the trend could drive up costs at least in the short term, according to a report from the Center for Studying Health System Change.
Physicians employed by hospitals are often paid based on their productivity, which offers an incentive to increase the volume of services. And in some cases, physicians are under pressure from their hospitals to order more expensive tests, according to the report.
The researchers from the Center for Studying Health System Change based their analysis on interviews with nearly 550 physicians, hospital executives, health plan officials, and others, in 12 nationally representative metropolitan communities: Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey, Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y.
"The acceleration in hospital employment of physicians risks raising costs and not improving quality of care unless payment reforms shift provider incentives away from volume toward higher quality and efficiency," said Dr. Ann S. O’Malley of the Center for Studying Health System Change and a coauthor of the study.
The trend toward hospitals’ employing more physicians can also drive up costs because hospitals are able to charge hospital facility fees for office visits and procedures, even when those services are administered in a physician’s office. That means that Medicare – and in some cases private insurers – are paying significantly more for the same services simply because the physician is employed by the hospital.
Hospital employment of physicians does have the potential to improve quality through better integration of care and communication between physicians. The problem, the researchers noted, is that integration and communication can be slow to improve just because physicians get their paychecks from the hospital.
The research was funded by the Robert Wood Johnson Foundation and the National Institute for Health Care Reform.
Hospital employment of physicians continues to rise rapidly around the country, but the trend could drive up costs at least in the short term, according to a report from the Center for Studying Health System Change.
Physicians employed by hospitals are often paid based on their productivity, which offers an incentive to increase the volume of services. And in some cases, physicians are under pressure from their hospitals to order more expensive tests, according to the report.
The researchers from the Center for Studying Health System Change based their analysis on interviews with nearly 550 physicians, hospital executives, health plan officials, and others, in 12 nationally representative metropolitan communities: Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey, Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y.
"The acceleration in hospital employment of physicians risks raising costs and not improving quality of care unless payment reforms shift provider incentives away from volume toward higher quality and efficiency," said Dr. Ann S. O’Malley of the Center for Studying Health System Change and a coauthor of the study.
The trend toward hospitals’ employing more physicians can also drive up costs because hospitals are able to charge hospital facility fees for office visits and procedures, even when those services are administered in a physician’s office. That means that Medicare – and in some cases private insurers – are paying significantly more for the same services simply because the physician is employed by the hospital.
Hospital employment of physicians does have the potential to improve quality through better integration of care and communication between physicians. The problem, the researchers noted, is that integration and communication can be slow to improve just because physicians get their paychecks from the hospital.
The research was funded by the Robert Wood Johnson Foundation and the National Institute for Health Care Reform.