Study: Hospital-owned practices increased cost of care in California

When hospitals acquire medical groups and physician practices, this consolidation can lead to higher costs, according to a study that appeared recently in the Journal of the American Medical Association. The JAMA study found that total expenditures per patient were higher in physician organizations (integrated medical groups and independent practice associations) owned by local hospitals or multihospital systems compared with groups owned by participating physicians.

The study examined total expenditures for the care provided to 4.5 million patients treated by integrated medical groups and independent practice associations in California between 2009 and 2012. Results were adjusted for patient severity and other factors. Local hospital-owned physician organizations incurred expenditures per patient that were more than 10% higher than those of physician-owned organizations. Organizations owned by multihospital systems incurred expenditures almost 20% higher than physician-owned organizations. The largest physician organizations incurred expenditures per patient that were more than 9% higher than the smallest organizations.

“Although organizational consolidation may increase some forms of care coordination, it may be associated with higher total expenditures,” study authors concluded.

Source: JAMA