Unchecked Provider Clout In California Foreshadows Challenges To Health Reform

Vertical Integration and Physician Practice Labor Composition

With the growth of vertical integration among physician practices (i.e., hospital-physician integration), there have been many studies of its effects on health care treatments and spending. It is unknown if integration shapes provider configurations, especially against the backdrop of increasing employment of nurse practitioners (NPs) and physician assistants (PAs) across specialties. Using a longitudinal panel of 144,289 practices (2008-2015), we examined the association of vertical integration with NP and PA employment. We find positive associations between vertical integration and newly employing NPs and PAs within physician practices; however, the relationships differ by practice specialty type as well as timing of vertical integration. Supplementary analyses offer supporting evidence for coinciding enhancements to practice productivity, diversification, and provider task allocation. Our results suggest that vertical integration may promote interdisciplinary provider configurations, which has the potential to improve care delivery efficiency.

Weighing the Effects of Vertical Integration Versus Market Concentration on Hospital Quality

Provider organizations are increasing in complexity, as hospitals acquire physician practices and physician organizations grow in size. At the same time, hospitals are merging with each other to improve bargaining power with insurers. We analyze 29 quality measures reported to the Center for Medicare and Medicaid Services' Hospital Compare database for 2008 to 2015 to test whether vertical integration between hospitals and physicians or increases in hospital market concentration influence patient outcomes. Vertical integration has a limited effect on a small subset of quality measures. Yet increased market concentration is strongly associated with reduced quality across all 10 patient satisfaction measures at the 95% confidence level (p < .05) and 6 of the 10 patient satisfaction measures remain statistically significant with a Bonferroni corrected p value (p < .005). Regulators should continue to focus scrutiny on proposed hospital mergers, take steps to maintain competition, and reduce counterproductive barriers to entry.

Horizontal and vertical integration's role in meaningful use attestation over time

OBJECTIVE

To compare rates of attestation and attrition from the MU program by independent, horizontally integrated, and vertically integrated physicians and to assess whether MU created pressure for independent physicians to join integrated organizations.

DATA SOURCE/STUDY SETTING

Secondary Data from SK&A and Medicare MU Files, 2011-2016. Office-based physicians in the 50 United States and District of Columbia.

STUDY DESIGN

We compared attestation rates among physicians that remained independent or integrated throughout the study period. We then assessed the association between changing integration and MU attestation in multivariate regression models.

PRINCIPAL FINDINGS

Our sample included 291 234 physicians. Forty nine percent of physicians that remained independent throughout the period attested to MU at least once during the program, compared with 70 percent of physicians that remained horizontally or vertically integrated physicians. Only approximately 50 percent of independent physicians that attested between 2011 and 2013 attested in 2015, representing significantly more attrition than we observed among integrated physicians. In multivariate regression models, physicians that joined these organizations were more likely to have attested to MU prior to integrating and this difference increased following integration.

CONCLUSIONS

These findings point toward a growing digital divide between physicians who remain independent and integrated physicians that may have been exacerbated by the MU program. Targeted public policy, such as new regional extension centers, should be considered to address this disparity.

Modelling competition in health care markets as a complex adaptive system: an agent-based framework

Health market reforms necessitate continuous re-evaluation of initiatives, competitive regulations, and antitrust policies. Synergistic implications, evolution, and behaviour changes associated with the market competition are often overlooked due to methodological limitations. To rectify these limitations, parallels between defining features of health care markets (HCM) and complex adaptive systems (CAS) are drawn. The science of CAS develops complex system-level models of dynamic interactions to allow insights for heterogeneous agents and emergent behaviours. Agent-based modelling (ABM) is a computational tool of CAS science suitable for investigating competition in HCM. The proposed agent-based framework conceptualises agents, environment, and interactions, and formalises agent-specific attributes and modules that achieve agent roles to recreate HCM dynamics. The framework conceptualises competition in HCM into an implementable ABM for a CAS assessment, identifies data sources, and develops face-validity procedures. Developments in data, computational power, and decisions theory compel CAS approach to complement studies on pressing HCM issues.

Spending per Medicare Beneficiary Is Higher in Hospital-Owned Small- and Medium-Sized Physician Practices

OBJECTIVE

To examine the relationship of physician versus hospital ownership of small- and medium-sized practices with spending and utilization of care.

DATA SOURCE/STUDY SETTING/DATA COLLECTION

Survey data for 1,045 primary care-based practices of 1-19 physicians linked to Medicare claims data for 2008 for 282,372 beneficiaries attributed to the 3,010 physicians in these practices.

STUDY DESIGN

We used generalized linear models to estimate the associations between practice characteristics and outcomes (emergency department visits, index admissions, readmissions, and spending).

PRINCIPAL FINDINGS

Beneficiaries linked to hospital-owned practices had 7.3 percent more emergency department visits and 6.4 percent higher total spending compared to beneficiaries linked to physician-owned practices.

CONCLUSIONS

Physician practices are increasingly being purchased by hospitals. This may result in higher total spending on care.

Vertical Integration of Hospitals and Physicians: Economic Theory and Empirical Evidence on Spending and Quality

Hospital–physician vertical integration is on the rise. While increased efficiencies may be possible, emerging research raises concerns about anticompetitive behavior, spending increases, and uncertain effects on quality. In this review, we bring together several of the key theories of vertical integration that exist in the neoclassical and institutional economics literatures and apply these theories to the hospital–physician relationship. We also conduct a literature review of the effects of vertical integration on prices, spending, and quality in the growing body of evidence ( n = 15) to evaluate which of these frameworks have the strongest empirical support. We find some support for vertical foreclosure as a framework for explaining the observed results. We suggest a conceptual model and identify directions for future research. Based on our analysis, we conclude that vertical integration poses a threat to the affordability of health services and merits special attention from policymakers and antitrust authorities.

Hospital and Health Insurance Markets Concentration and Inpatient Hospital Transaction Prices in the U.S. Health Care Market

OBJECTIVE

To examine the effects of hospital and insurer markets concentration on transaction prices for inpatient hospital services.

DATA SOURCES

Measures of hospital and insurer markets concentration derived from American Hospital Association and HealthLeaders-InterStudy data are linked to 2005-2008 inpatient administrative data from Truven Health MarketScan Databases.

STUDY DESIGN

Uses a reduced-form price equation, controlling for cost and demand shifters and accounting for possible endogeneity of market concentration using instrumental variables (IV) technique.

PRINCIPAL FINDINGS

The findings suggest that greater hospital concentration raises prices, whereas greater insurer concentration depresses prices. A hypothetical merger between two of five equally sized hospitals is estimated to increase hospital prices by about 9 percent (p < .001). A similar merger of insurers would depress prices by about 15.3 percent (p < .001). Over the 2003-2008 periods, the estimates imply that hospital consolidation likely raised prices by about 2.6 percent, while insurer consolidation depressed prices by about 10.8 percent. Additional analysis using longer panel data and applying hospital fixed effects confirms the impact of hospital concentration on prices.

CONCLUSION

The findings provide support for strong antitrust enforcement to curb rising hospital service prices and health care costs.

Large Independent Primary Care Medical Groups

PURPOSE

In the turbulent US health care environment, many primary care physicians seek hospital employment. Large physician-owned primary care groups are an alternative, but few physicians or policy makers realize that such groups exist. We wanted to describe these groups, their advantages, and their challenges.

METHODS

We identified 21 groups and studied 5 that varied in size and location. We conducted interviews with group leaders, surveyed randomly selected group physicians, and interviewed external observers-leaders of a health plan, hospital, and specialty medical group that shared patients with the group. We triangulated responses from group leaders, group physicians, and external observers to identify key themes.

RESULTS

The groups' physicians work in small practices, with the group providing economies of scale necessary to develop laboratory and imaging services, health information technology, and quality improvement infrastructure. The groups differ in their size and the extent to which they engage in value-based contracting, though all are moving to increase the amount of financial risk they take for their quality and cost performance. Unlike hospital-employed and multispecialty groups, independent primary care groups can aim to reduce health care costs without conflicting incentives to fill hospital beds and keep specialist incomes high. Each group was positively regarded by external observers. The groups are under pressure, however, to sell to organizations that can provide capital for additional infrastructure to engage in value-based contracting, as well as provide substantial income to physicians from the sale.

CONCLUSIONS

Large, independent primary care groups have the potential to make primary care attractive to physicians and to improve patient care by combining human scale advantages of physician autonomy and the small practice setting with resources that are important to succeed in value-based contracting.

Does health plan generosity enhance hospital market power?

We test whether the generosity of employer-sponsored health insurance facilitates the exercise of market power by hospitals. We construct indices of health plan generosity and the price and volume of hospital services using data from Truven MarketScan for 601 counties from 2001 to 2007. We use variation in the industry and union status of covered workers within a county over time to identify the causal effects of generosity. Although OLS estimates fail to reject the hypothesis that generosity facilitates the exercise of hospital market power, IV estimates show a statistically significant and economically important positive effect of plan generosity on hospital prices in uncompetitive markets, but not in competitive markets. Our results suggest that most of the aggregate effect of hospital market structure on prices found in previous work may be coming from areas with generous plans.

No Significant Association between Anesthesia Group Concentration and Private Insurer Payments in the United States

Background:

Markets for physician services are becoming increasingly concentrated, with many areas being dominated by a few groups. Antitrust authorities are concerned that increasing concentration will lead to inappropriately high payments for physician services from private insurers. The authors examined the association between market concentration and private insurer payments for anesthesia services.

Methods:

The authors obtained data on average payments from private insurers for five commonly used anesthesia Current Procedure Terminology codes for physicians located in 229 counties in the United States between 2002 and 2010. The authors calculated a measure of market concentration (the Herfindahl–Hirschman Index [HHI]) for anesthesiologists in each county using Medicare claims data. The authors then estimated the association between market concentration and private insurer payments using a difference-in-differences approach to minimize confounding.

Results:

Private insurer payments to anesthesiologists in more concentrated markets were not significantly different from payments in less concentrated markets. Compared with the 25% of counties with the least concentration (counties with an HHI in the 0th to 25th percentile), payments in counties in the 25th to 50th percentile of HHI were approximately 0.51% less (95% CI, −2.3 to 1.3%, P = 0.95), whereas payments in counties in the 50th to 75th percentile of HHI were approximately 2.8% less (95% CI, −6.7 to 1.4%, P = 0.41) and payments in counties in the 75th to 100th percentile were approximately 3.1% less (95% CI, −8.1 to 1.2%, P = 0.32).

Conclusion:

Increasing market concentration of anesthesia groups is not associated with significantly greater payments from private insurers.

Accountable Care Organizations in California: Market Forces at Work?

Accountable care organizations (ACOs), one of the most recent and promising health care delivery innovations, encourage care coordination among providers. While ACOs hold promise for decreasing costs by reducing unnecessary procedures, improving resource use as a result of economies of scale and scope, ACOs also raise concerns about provider market power. This study examines the market-level competition factors that are associated with ACO participation and the number of ACOs. Using data from California, we find that higher levels of preexisting managed care leads to higher ACO entry and enrollment growth, while hospital concentration leads to fewer ACOs and lower enrollment. We find interesting results for physician market power - markets with concentrated physician markets have a smaller share of individuals in commercial ACOs but a larger number of commercial ACO organizations. This finding implies smaller ACOs in these markets.

Addressing Pricing Power in Integrated Delivery: The Limits of Antitrust

Prices are the major driver of why the United States spends so much more on health care than other countries do. The pricing power that hospitals have garnered recently has resulted from consolidated delivery systems and concentrated markets, leading to enhanced negotiating leverage. But consolidation may be the wrong frame for viewing the problem of high and highly variable prices; many "must-have" hospitals achieve their pricing power from sources other than consolidation, for example, reputation. Further, the frame of consolidation leads to unrealistic expectations for what antitrust's role in addressing pricing power should be, especially because in the wake of two periods of merger "manias" and "frenzies" many markets already lack effective competition. It is particularly challenging for antitrust to address extant monopolies lawfully attained. New payment and delivery models being pioneered in Medicare, especially those built around accountable care organizations (ACOs), offer an opportunity to reduce pricing power, but only if they are implemented with a clear eye on the impact on prices in commercial insurance markets. This article proposes approaches that public and private payers should consider to complement the role of antitrust to assure that ACOs will actually help control costs in commercial markets as well as in Medicare and Medicaid.

Exploring the Potential of Predictive Analytics and Big Data in Emergency Care

Clinical research often focuses on resource-intensive causal inference, whereas the potential of predictive analytics with constantly increasing big data sources remains largely unexplored. Basic prediction, divorced from causal inference, is much easier with big data. Emergency care may benefit from this simpler application of big data. Historically, predictive analytics have played an important role in emergency care as simple heuristics for risk stratification. These tools generally follow a standard approach: parsimonious criteria, easy computability, and independent validation with distinct populations. Simplicity in a prediction tool is valuable, but technological advances make it no longer a necessity. Emergency care could benefit from clinical predictions built using data science tools with abundant potential input variables available in electronic medical records. Patients' risks could be stratified more precisely with large pools of data and lower resource requirements for comparing each clinical encounter to those that came before it, benefiting clinical decisionmaking and health systems operations. The largest value of predictive analytics comes early in the clinical encounter, in which diagnostic and prognostic uncertainty are high and resource-committing decisions need to be made. We propose an agenda for widening the application of predictive analytics in emergency care. Throughout, we express cautious optimism because there are myriad challenges related to database infrastructure, practitioner uptake, and patient acceptance. The quality of routinely compiled clinical data will remain an important limitation. Complementing big data sources with prospective data may be necessary if predictive analytics are to achieve their full potential to improve care quality in the emergency department.

Physician organization care management capabilities associated with effective inpatient utilization management: a fuzzy set qualitative comparative analysis

Background

We studied the relationship between physician organization (PO) care management capabilities and inpatient utilization in order to identify PO characteristics or capabilities associated with low inpatient bed-days per thousand.

Methods

We used fuzzy-set qualitative comparative analysis (fsQCA) to conduct an exploratory comparative case series study. Data about PO capabilities were collected using structured interviews with medical directors at fourteen California POs that are delegated to provide inpatient utilization management (UM) for HMO members of a California health plan. Health plan acute hospital claims from 2011 were extracted from a reporting data warehouse and used to calculate inpatient utilization statistics. Supplementary analyses were conducted using Fisher’s Exact Test and Student’s T-test.

Results

POs with low inpatient bed-days per thousand minimized length of stay and surgical admissions by actively engaging in concurrent review, discharge planning, and surgical prior authorization, and by contracting directly with hospitalists to provide UM-related services. Disease and case management were associated with lower medical admissions and readmissions, respectively, but not lower bed-days per thousand.

Conclusions

Care management methods focused on managing length of stay and elective surgical admissions are associated with low bed-days per thousand in high-risk California POs delegated for inpatient UM. Reducing medical admissions alone is insufficient to achieve low bed-days per thousand. California POs with high bed-days per thousand are not applying care management best practices.

Electronic supplementary material

The online version of this article (doi:10.1186/s12913-014-0582-5) contains supplementary material, which is available to authorized users.

Private insurers' payments for routine physician office visits vary substantially across the United States

Anecdotal reports suggest that substantial variation exists in private insurers' payments for physician services, but systematic evidence is lacking. Using a retrospective analysis of insurance claims for routine office visits, consultations, and preventive visits from more than forty million physician claims in 2007, we examined variations in private payments to physicians and the extent to which variation is explained by patients' and physicians' characteristics and by geographic region. We found much variation in payments for these routine evaluation and management services. Physicians at the high end of the payment distribution were generally paid more than twice what physicians at the low end were paid for the same service. Little variation was explained by patients' age or sex, physicians' specialty, place of service, whether the physician was a "network provider," or type of plan, although about one-third of the variation was associated with the geographic area of the practice. Interventions that promote more price-consciousness on the part of patients could help reduce health care spending, but more data on the specific causes of price variation are needed to determine appropriate policy responses.

Decomposition of the drivers of the U.S. hospital spending growth, 2001-2009

BACKGROUND

United States health care spending rose rapidly in the 2000s, after a period of temporary slowdown in the 1990s. However, the description of the overall trend and the understanding of the underlying drivers of this trend are very limited. This study investigates how well historical hospital cost/revenue drivers explain the recent hospital spending trend in the 2000s, and how important each of these drivers is.

METHODS

We used aggregated time series data to describe the trend in total hospital spending, price, and quantity between 2001 and 2009. We used the Oaxaca-Blinder method to investigate the relative importance of major hospital cost/spending drivers (derived from the literature) in explaining the change in hospital spending patterns between 2001 and 2007. We assembled data from Medicare Cost Reports, American Hospital Association annual surveys, Prospective Payment System (PPS) Impact Files, Medicare Provider Analysis and Review (MedPAR) Medicare claims data, InterStudy reports, National Health Expenditure data, and Area Resource Files.

RESULTS

Aggregated time series trends show that high hospital spending between 2001 and 2009 appears to be driven by higher payment per unit of hospital output, not by increased utilization. Results using the Oaxaca-Blinder regression decomposition method indicate that changes in historically important spending drivers explain a limited 30% of unit-payment growth, but a higher 60% of utilization growth. Hospital staffing and labor-related costs, casemix, and demographics are the most important drivers of higher hospital revenue, utilization, and unit-payment. Technology is associated with lower utilization, higher unit payment, and limited increases in total revenue. Market competition, primarily because of increased managed care concentration, moderates total revenue growth by driving lower unit payment.

CONCLUSIONS

Much of the rapidly rising hospital spending growth in the 2000s in the United States is driven by factors not commonly known or well measured. Future studies need to explore new factors and dynamics that drive longer-term hospital spending growth in recent years, particularly through the channel of higher prices.

Regulatory neutrality is essential to establishing a level playing field for accountable care organizations

Accountable care organizations (ACOs) are among the most widely discussed models for encouraging movement away from fee-for-service payment arrangements. Although ACOs have the potential to slow health spending growth and improve quality of care, regulating them poses special challenges. Regulations, particularly those that affect both ACOs and Medicare Advantage plans, could inadvertently favor or disfavor certain kinds of providers or payers. Such favoritism could drive efficient organizations from the market and thus increase costs or reduce quality of and access to care. To avoid this type of outcome, we propose a general principle: Regulation of ACOs should strive to preserve a level playing field among different kinds of organizations seeking the same cost, quality, and access objectives. This is known as regulatory neutrality. We describe the implications of regulatory neutrality in four key areas: antitrust, financial solvency regulation, Medicare governance requirements, and Medicare payment models. We also discuss issues relating to short-term versus long-term perspectives--to promote the goal of regulatory neutrality and allow the most efficient organizations to prevail in the marketplace.

Health City Cayman Islands and the globalization of health services delivery

We describe a new health care campus under development in the Cayman Islands, Health City, based on the low-cost "focused factory" model. The construction of a multispecialty hospital opening in February 2014 less than a 4-hour flight away from the United States and convenient to both Central and South America for patients who already travel to the United States for clinical care could reshape the US health care marketplace and enhance access to affordable specialty health care in the region.

Accountable Care Organizations in the United States: market and demographic factors associated with formation

BACKGROUND

The Accountable Care Organization (ACO) model is rapidly being implemented by Medicare, private payers, and states, but little is known about the scope of ACO implementation.

OBJECTIVE

To determine the number of accountable care organizations in the United States, where they are located, and characteristics associated with ACO formation.

STUDY DESIGN, METHODS, AND DATA

Cross-sectional study of all ACOs in the United States as of August 2012. We identified ACOs from multiple sources; documented service locations (practices, clinics, hospitals); and linked service locations to local areas, defined as Dartmouth Atlas hospital service areas. We used multivariate analysis to assess what characteristics were associated with local ACO presence. We examined demographic characteristics (2010 American Community Survey) and health care system characteristics (2010 Medicare fee-for-service claims data).

PRINCIPAL FINDINGS

We identified 227 ACOs located in 27 percent of local areas. Fifty-five percent of the US population resides in these areas. HSA-level characteristics associated with ACO presence include higher performance on quality, higher Medicare per capita spending, fewer primary care physician groups, greater managed care penetration, lower poverty rates, and urban location.

CONCLUSIONS

Much of the US population resides in areas where ACOs have been established. ACO formation has taken place where it may be easier to meet quality and cost targets. Wider adoption of the ACO model may require tailoring to local context.

Delivery system integration and health care spending and quality for Medicare beneficiaries

IMPORTANCE

The Medicare accountable care organization (ACO) programs rely on delivery system integration and health care provider risk sharing to lower spending while improving quality of care.

OBJECTIVE

To compare spending and quality between larger and smaller provider groups and examine how size-related differences vary by 2 factors considered central to ACO performance: group primary care orientation and financial risk sharing by health care providers.

EVIDENCE REVIEW

Using 2009 Medicare claims and linked American Medical Association Group Practice data, we assigned 4.29 million beneficiaries to health care provider groups based on primary care use. We categorized group size according to eligibility thresholds for the Shared Savings (≥5000 assigned beneficiaries) and Pioneer (≥15,000) ACO programs and distinguished hospital-based from independent groups. We assessed the primary care orientation of larger groups' specialty mix and used health maintenance organization market penetration and data from the Community Tracking Study to measure the extent of financial risk accepted by different types of provider groups in different areas for managed care patients. We estimated linear regression models comparing spending and quality between larger and smaller health care provider groups, allowing size-related differences to vary by measures of group primary care orientation and risk sharing. Spending and quality measures included total medical spending, spending by type of service, 5 process measures of quality, and 30-day readmissions, all adjusted for sociodemographic and clinical characteristics.

FINDINGS

Compared with smaller groups, larger hospital-based groups had higher total per-beneficiary spending in 2009 (mean difference, +$849), higher 30-day readmission rates (+1.3 percentage points), and similar performance on 4 of 5 process measures of quality. In contrast, larger independent physician groups performed better than smaller groups on all process measures and exhibited significantly lower per-beneficiary spending in counties where risk sharing by these groups was more common (-$426). Among all groups sufficiently large to participate in ACO programs, a strong primary care orientation was associated with lower spending, fewer readmissions, and better quality of diabetes care.

CONCLUSIONS AND RELEVANCE

Spending was lower and quality of care better for Medicare beneficiaries served by larger independent physician groups with strong primary care orientations in environments where health care providers accepted greater risk.

Opportunities and challenges in supply-side simulation: physician-based models

OBJECTIVE

To provide a conceptual framework and to assess the availability of empirical data for supply-side microsimulation modeling in the context of health care.

DATA SOURCES

Multiple secondary data sources, including the American Community Survey, Health Tracking Physician Survey, and SK&A physician database.

STUDY DESIGN

We apply our conceptual framework to one entity in the health care market-physicians-and identify, assess, and compare data available for physician-based simulation models.

PRINCIPAL FINDINGS

Our conceptual framework describes three broad types of data required for supply-side microsimulation modeling. Our assessment of available data for modeling physician behavior suggests broad comparability across various sources on several dimensions and highlights the need for significant integration of data across multiple sources to provide a platform adequate for modeling. A growing literature provides potential estimates for use as behavioral parameters that could serve as the models' engines. Sources of data for simulation modeling that account for the complex organizational and financial relationships among physicians and other supply-side entities are limited.

CONCLUSIONS

A key challenge for supply-side microsimulation modeling is optimally combining available data to harness their collective power. Several possibilities also exist for novel data collection. These have the potential to serve as catalysts for the next generation of supply-side-focused simulation models to inform health policy.

Where Americans get acute care: increasingly, it's not at their doctor's office

Historically, general practitioners provided first-contact care in the United States. Today, however, only 42 percent of the 354 million annual visits for acute care--treatment for newly arising health problems--are made to patients' personal physicians. The rest are made to emergency departments (28 percent), specialists (20 percent), or outpatient departments (7 percent). Although fewer than 5 percent of doctors are emergency physicians, they handle a quarter of all acute care encounters and more than half of such visits by the uninsured. Health reform provisions in the Patient Protection and Affordable Care Act that advance patient-centered medical homes and accountable care organizations are intended to improve access to acute care. The challenge for reform will be to succeed in the current, complex acute care landscape.

A national strategy to put accountable care into practice

The concept of accountable care organizations (ACOs) has been set forth in recently enacted national health reform legislation as a strategy to address current shortcomings in the U.S. health care system. This paper focuses on implementation issues related to these organizations, building on some initial examples. We seek to clarify definitions and key principles, provide an update on implementation in the context of other reforms, and address emerging issues that will affect the organizations' success. Finally, building on the initial experience of several organizations that are implementing accountable care and complementary reforms, we propose a national strategy to identify and expand successful approaches to accountable care implementation.

Horizontal and vertical integration of physicians: a tale of two tails

PURPOSE

Researchers recommend a reorganization of the medical profession into larger groups with a multispecialty mix. We analyze whether there is evidence for the superiority of these models and if this organizational transformation is underway. DESIGN/METHODOLOGY APPROACH: We summarize the evidence on scale and scope economies in physician group practice, and then review the trends in physician group size and specialty mix to conduct survivorship tests of the most efficient models.

FINDINGS

The distribution of physician groups exhibits two interesting tails. In the lower tail, a large percentage of physicians continue to practice in small, physician-owned practices. In the upper tail, there is a small but rapidly growing percentage of large groups that have been organized primarily by non-physician owners.

RESEARCH LIMITATIONS

While our analysis includes no original data, it does collate all known surveys of physician practice characteristics and group practice formation to provide a consistent picture of physician organization.

RESEARCH IMPLICATIONS

Our review suggests that scale and scope economies in physician practice are limited. This may explain why most physicians have retained their small practices.

PRACTICAL IMPLICATIONS

Larger, multispecialty groups have been primarily organized by non-physician owners in vertically integrated arrangements. There is little evidence supporting the efficiencies of such models and some concern they may pose anticompetitive threats.

ORIGINALITY/VALUE

This is the first comprehensive review of the scale and scope economies of physician practice in nearly two decades. The research results do not appear to have changed much; nor has much changed in physician practice organization.

Analyzing shifts in economic risks to providers in proposed payment and delivery system reforms

A key consideration in implementing the Patient Protection and Affordable Care Act of 2010 will be changing Medicare payments to providers to slow the growth in costs and spur improvements in health care delivery. In addition to the technical feasibility of new payment models, a crucial issue will be the capacity of the health care system to assume more economic risk. This article analyzes some of the major models under consideration and assesses how feasible their implementation would be.

The many different prices paid to providers and the flawed theory of cost shifting: is it time for a more rational all-payer system?

In developed nations that rely on multiple, competing health insurers-for example, Switzerland and Germany-the prices for health care services and products are subject to uniform price schedules that are either set by government or negotiated on a regional basis between associations of health insurers and associations of providers of health care. In the United States, some states-notably Maryland-have used such all-payer systems for hospitals only. Elsewhere in the United States, prices are negotiated between individual payers and providers. This situation has resulted in an opaque system in which payers with market power force weaker payers to cover disproportionate shares of providers' fixed costs-a phenomenon sometimes termed cost shifting-or providers simply succeed in charging higher prices when they can. In this article I propose that this price-discriminatory system be replaced over time by an all-payer system as a means to better control costs and ensure equitable payment.

Analysis & commentary: The accountable care organization: whatever its growing pains, the concept is too vitally important to fail

The success of health reform efforts will depend, in part, on creating new and better ways to organize, deliver, and pay for health care. Increasingly central to this idea is the accountable care organization model proposed for Medicare and a slightly different model for commercial health care. But these new health care delivery and payment models face considerable skepticism. Can Medicare succeed with accountable care organizations if physicians can't determine whether patients are in the organization or not? Will commercial hospitals use their clout to create accountable care organizations, leaving physician practices in a weaker position? This article answers those and other criticisms of the developing accountable care organization movement. If the concept fails, the nation may face indiscriminate cuts to health care payments, with resulting reductions in access, service, and quality.

The crossroads of evidence-based medicine and health policy: implications for urology

As healthcare spending in the United States continues to rise at an unsustainable rate, recent policy decisions introduced at the national level will rely on precepts of evidence-based medicine to promote the determination, dissemination, and delivery of "best practices" or quality care while simultaneously reducing cost. We discuss the influence of evidence-based medicine on policy and, in turn, the impact of policy on the developing clinical evidence base with an eye to the potential effects of these relationships on the practice and provision of urologic care.

How much do hospitals cost shift? A review of the evidence

CONTEXT

Hospital cost shifting--charging private payers more in response to shortfalls in public payments--has long been part of the debate over health care policy. Despite the abundance of theoretical and empirical literature on the subject, it has not been critically reviewed and interpreted since Morrisey did so nearly fifteen years ago. Much has changed since then, in both empirical technique and the health care landscape. This article examines the theoretical and empirical literature on cost shifting since 1996, synthesizes the predominant findings, suggests their implications for the future of health care costs, and puts them in the current policy context.

METHODS

The relevant literature was identified by database search. Papers describing policies were considered first, since policy shapes the health care market in which cost shifting may or may not occur. Theoretical works were examined second, as theory provides hypotheses and structure for empirical work. The empirical literature was analyzed last in the context of the policy environment and in light of theoretical implications for appropriate econometric specification.

FINDINGS

Most of the analyses and commentary based on descriptive, industry-wide hospital payment-to-cost margins by payer provide a false impression that cost shifting is a large and pervasive phenomenon. More careful theoretical and empirical examinations suggest that cost shifting can and has occurred, but usually at a relatively low rate. Margin changes also are strongly influenced by the evolution of hospital and health plan market structures and changes in underlying costs.

CONCLUSIONS

Policymakers should view with a degree of skepticism most hospital and insurance industry claims of inevitable, large-scale cost shifting. Although some cost shifting may result from changes in public payment policy, it is just one of many possible effects. Moreover, changes in the balance of market power between hospitals and health care plans also significantly affect private prices. Since they may increase hospitals' market power, provisions of the new health reform law that may encourage greater provider integration and consolidation should be implemented with caution.

Reforming payments to healthcare providers: the key to slowing healthcare cost growth while improving quality?

This paper focuses on a broad movement toward a fundamentally different way of paying healthcare providers. The approach reaches beyond the old dichotomies about whether healthcare providers are reimbursed on a fee-for-service or a "capitated" or per-person payment. Instead, these reforms seek to create direct linkages between payments to healthcare providers and measures of the quality and efficiency of care. After an overview of payment reforms for healthcare providers and their welfare implications, this paper discusses a range of empirical studies. These often small-scale studies suggest that provider payment reforms in conjunction with greater attention to improving measurements of care quality and outcomes can have a significant impact on quality of care and, in some cases, resource use and costs of care.