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.

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.

Small primary care physician practices have low rates of preventable hospital admissions

Nearly two-thirds of US office-based physicians work in practices of fewer than seven physicians. It is often assumed that larger practices provide better care, although there is little evidence for or against this assumption. What is the relationship between practice size--and other practice characteristics, such as ownership or use of medical home processes--and the quality of care? We conducted a national survey of 1,045 primary care-based practices with nineteen or fewer physicians to determine practice characteristics. We used Medicare data to calculate practices' rate of potentially preventable hospital admissions (ambulatory care-sensitive admissions). Compared to practices with 10-19 physicians, practices with 1-2 physicians had 33 percent fewer preventable admissions, and practices with 3-9 physicians had 27 percent fewer. Physician-owned practices had fewer preventable admissions than hospital-owned practices. In an era when health care reform appears to be driving physicians into larger organizations, it is important to measure the comparative performance of practices of all sizes, to learn more about how small practices provide patient care, and to learn more about the types of organizational structures--such as independent practice associations--that may make it possible for small practices to share resources that are useful for improving the quality of care.

Electronic communication improves access, but barriers to its widespread adoption remain

Because electronic communication is quick, convenient, and inexpensive for most patients, care that is truly patient centered should promote the use of such communication between patients and providers, even using it as a substitute for office visits when clinically appropriate. Despite the potential benefits of electronic communication, fewer than 7 percent of providers used it in 2008. To learn from the experiences of providers that have widely incorporated electronic communication into patient care, we interviewed leaders of twenty-one medical groups that use it extensively with patients. We also interviewed staff in six of those groups. Electronic communication was widely perceived to be a safe, effective, and efficient means of communication that improves patient satisfaction and saves patients time but that increases the volume of physician work unless office visits are reduced. Practice redesign and new payment methods are likely necessary for electronic communication to be more widely used in patient care.