Study: Costs, spending rise when hospitals buy practices

Hospitals have increasingly acquired physician practices during the past decade, arguing that doing so helps them coordinate care and control costs. However, when hospitals buy physician practices, the result is usually higher hospital prices and increased spending by privately insured patients, according to a study published earlier this week in the journal Health Affairs.

The study was based on an analysis of 2.1 million hospital claims from workers of self-insured employers between 2001 and 2007. The analysis by Stanford University researchers found prices were most likely to increase when hospitals bought physician practices, as opposed to hospitals forming looser contractual relationships with physicians. Experts say the Stanford study could give the FTC ammunition to more closely examine and potentially block future hospital purchases.

Source: Kaiser Health News, Washington Post