Physician Compensation In Physician-Owned And Hospital-Owned Practices

Changes in the Radiology Practice Landscape and Indicators of Practice Consolidation From 2014 to 2023

Background: A range of economic and health policy incentives are leading to ongoing consolidation among payers, hospitals, and physician practices. Objective: To evaluate consolidation among radiologists' affiliated practices through 2023, analyze the impact of consolidation on such practices' specialty mix and size, and assess radiologists' new affiliations after prior practices cease. Methods: CMS data from 2014 to 2023 were used to identify all radiologists nationally along with their affiliated practices. Practices were categorized based on the specialty mix of all affiliated physicians as radiology-only or multispecialty; multispecialty practices were further categorized as radiology-majority, other-specialty-majority,or no-majority-specialty. Practices that ceased (i.e., became absent within CMS data) were identified. Temporal shifts were assessed, to infer consolidation patterns. Results: From 2014 to 2023, the number of Medicare-enrolled radiologists increased 17.3% from 30,723 to 36,024, while their number of affiliated practices decreased 14.7% from 5059 to 4313. The number of radiology-only, radiology-majority, other-specialty-majority, and no-majority practices changed by -31.8% (3104 to 2118), 10.8% (402 to 446), -5.7% (615 to 580), and 24.6% (938 to 1169), respectively. The number of practices with 1-2, 3-9, 10-24, 25-49, 50-99, and ≥100 radiologists changed by -18.7% (2233 to 1815), -34.4% (1406 to 923), -25.2% (910 to 681), 33.2% (352 to 469), 121.6% (125 to 277), and 348.5% (33 to 148). A total of 3494 practices ceased, including 2281 radiology-only practices. Among 3854 radiologists for whom their only affiliation was a ceased radiology-only practice, their subsequent-year affiliation was a radiology-only practice in 54.3% and a multispecialty practice type in the remaining instances. Conclusions: An overall decrease in the number of radiology practices and concurrent growth in the number of radiologists was mirrored by shifts from small toward large practices and from radiology-only toward multispecialty practices, consistent with ongoing practice consolidation. While determining causes of consolidation were beyond this study's scope, the shifts may relate to economic incentives and legislative changes favoring large multispecialty practices. Clinical Impact: Radiologists' continued consolidation into large multispecialty practices may facilitate subspecialization and greater negotiating power in payor contracting. Yet radiologists may prefer smaller and/or radiology-only practices for autonomy and influence on practice structure.

Market landscape and insurer-provider integration: the case of ambulatory surgery centers

Insurer-provider integration is a new form of vertical integration, with increasing prominence in health care markets. While there are potential benefits from tighter alignment between providers and payers, risks of perverse impacts on health care markets loom large. Yet, little is known about this new wave of consolidation, which limits options for policy or regulatory responses. We focus on a dominant insurer's acquisitions of ambulatory surgery centers (ASCs) to document the growth and geographic spread of these ownership events. We found that a diverse swathe of the United States has experienced an insurer-led ASC takeover. The acquisitions are also more frequently in areas where the insurer holds a higher enrollee market share at baseline, although a linear prediction of the likelihood of ASC acquisition shows a more nuanced picture.

The Risks and Benefits of Physician Practice Acquisition and Consolidation: A Narrative Review of Peer-Reviewed Publications Between 2009 and 2022 in the United States

The objective of this narrative review was to assess current literature regarding acquisition and consolidation of physician practices in the United States (US). The acquisition and consolidation of physician practices is a trend affecting patient care, quality of services, healthcare economics and the daily practice of physicians. As practices are acquired by fellow physician groups, private equity investors and entities such as hospitals or large healthcare systems, it is important to better understand the underlying forces driving these transactions and their effects. This is a narrative review of peer-reviewed publications to determine what current literature has covered regarding the acquisition and consolidation of physician practices in the US regarding risks and benefits of this trend. Sources included the SCOPUS, Medline- PUBMED and Web of Science databases. Peer reviewed publications from 2009 to 2022 were included for initial review and curation for relevance using the search terms "physician" and "practice" with either "acquisition" or "consolidation". Synthesis conducted after narrowing down of relevant articles did not use quantitative measurements, but instead examined overall trends, as well as risk and benefits of ongoing acquisition and consolidation in a narrative format. Journal articles focused on physician consolidation in the US often reported increases in physician numbers with decreases in numbers of individual practices. Private equity quantitative analyses reported rapidly accelerating acquisitions driven by these investors, and vertical integration scholarly work reported frequent geographic consolidation of nearby practitioners. Risks associated with these transactions included such items as decreased physician autonomy and higher cost of care. Benefits included practice stability, improved negotiation with insurers and improved access to resources.

Physician selection for hospital integration: Theoretical considerations and empirical findings

BACKGROUND

The U.S. health care system has seen an increase in hospital-physician integration, with hospitals acquiring increasing numbers of physician practices. This shift has been linked to higher costs without significant improvements in quality.

PURPOSE

This study sought to identify the characteristics of physicians who transitioned from independent practice to hospital integration.

METHODOLOGY/APPROACH

We used physician variables, including quality scores, medical school rankings, years of experience, experience treating socially or medically complex patients, practice style, and location, as well as health care market and county-level variables to understand these determinants using a fixed-effects logistic regression model.

RESULTS

A total of 101,746 physicians representing 66 clinical specialties satisfied our inclusion criteria, of which 3,656 became hospital-integrated between 2018 and 2020. The integrating physicians were generally less experienced, had lower quality scores, and generated less revenue per Medicare patient. Their patients, on average, had higher comorbidity scores, were more likely to be dually eligible, and resided in counties with higher poverty rates.

CONCLUSION

Our findings indicate that the physicians most likely to become hospital integrated are those facing reimbursement pressures due to a complex case mix and the associated challenges of performing well on the quality metrics. We also found some support for the anticompetitive aspects of hospital-physician integration. Our results suggest that hospitals are integrating with a relatively less experienced physician workforce but one that is perhaps more capable of treating clinically and socioeconomically complex patients.

PRACTICE IMPLICATIONS

Hospitals interested in using physician integration strategically to improve care quality should put more emphasis on physician quality. Such an approach has the potential to increase efficiency without sacrificing quality of care.

Hospital-physician integration and clinical volume in traditional Medicare

OBJECTIVE

To test the effect of hospital-physician integration on primary care physicians' (PCP) clinical volume in traditional Medicare.

DATA SOURCES AND STUDY SETTING

Nationwide retrospective longitudinal study using Medicare claims and other data sources from 2010 to 2016.

STUDY DESIGN

We identified 70,000 PCPs, some of whom remained non-integrated and some who became hospital-integrated during this study period. We used an event study design to identify the effect of integration on key measures of physicians' clinical volume, including the number of claims, work-relative value units (RVUs), professional revenue generated, number of patients treated, and facility fee revenue generated.

PRINCIPAL FINDINGS

Per-physician clinical volume declined by statistically and economically significant margins. Relative to the comparison group who remained non-integrated, work RVUs fell by 7% (95% confidence interval [CI]: -8.6% to -5.5%); the number of patients treated fell by 4% (95% CI: -5.8% to -2.6%); and claims volume among PCPs who became hospital-integrated fell by over 15% (95% CI: -16.8% to -13.5%). Though professional revenue declined by $29,165 (95% CI: -$32,286 to -$26,044), this loss was almost entirely offset by increased facility fee revenue of $28,556 (95% CI: 26,909 to 30,203).

CONCLUSIONS

Hospital-physician integration may affect the quantity of clinical services delivered by PCPs to traditional Medicare beneficiaries. Reductions in clinical volume associated with integration may have long-term consequences for the supply of physician services and patient access to primary care. Future research on physician time use and patient access following hospital integration would further add to the evidence base.

Association between hospital-physician vertical integration and medication adherence rates

OBJECTIVE

To test the association between vertical integration of primary care providers (PCPs) and adherence rates for anti-diabetics, renin angiotensin system antagonists (RASA), and statins.

DATA SOURCES

Medicare Part B outpatient fee-for-service claims and Medicare Part D event data from 2014 to 2017.

STUDY DESIGN

We estimated difference-in-differences regressions, comparing changes in adherence among patients with PCPs who converted from independent to integrated to changes among patients whose PCPs remained independent or integrated during the study period. To test for heterogenous impacts by patient demographics, we estimated triple difference regressions that included additional interaction terms by comorbidity rates, age group, and race/ethnicity.

EXTRACTION METHODS

We extracted Medicare claims for adults with continuous enrollment in Parts B and D during the study period.

PRINCIPAL FINDINGS

The proportion of patients who had a vertically integrated PCP increased by approximately 23% over the study period. Changes in adherence did not differ significantly between patients based on whether their PCP became integrated (Statins: 0.18, 95% CI -0.13, 0.49; RASA: -0.13, 95% CI -0.46, 0.19; Anti-Diabetics: -0.20, 95% CI -0.78, 0.38). Among patients with PCPs who became integrated, there were significant decreases in adherence for patients who were Black, Asian, Hispanic, or Native American, above 80 years old, and had greater comorbidities for all three classes.

CONCLUSIONS

While there were no average changes in adherence following vertical integration of PCPs, health equity worsened, with significant declines in adherence for Black, Asian, Hispanic, and Native American patients, patients over 80 years old, and patients with greater comorbidities. These findings suggest that integration may reduce clinicians' incentives to compete based on the quality of care delivered. Given the price increases associated with integration, integration may be a net welfare loss.