- Joined
- Mar 31, 2008
- Messages
- 1,381
- Reaction score
- 2,034
We're just getting fleeced.
Original tweet thread link here:
"Vertical integration - where hospitals acquire physician practices - is on the rise, having increased by 20 percentage points or more in many specialties since 2007. While integration is associated with higher prices, current evidence suggests a limited association with quality. As a result, we’re not crazy about encouraging more of it. That’s why we wanted to study the role of Medicare payment in driving vertical integration. Site-based differentials involve Medicare paying higher fees after a practice integrates with a hospital, creating incentives for integration. We quantified the size of the site-based differential and explored heterogeneity in the responsiveness to this incentive across specialty. On average, Medicare payment for physician services would have been 80% higher (about $100,000 per physician per year) if a practice were hospital-owned compared to physician-owned; this payment disparity varied by specialty. This differential showed a modest association with hospital-physician integration that varied by specialty; surgical specialties showed no statistical relationship to the payment disparity, while primary care and medical specialties did. These results underscore that the factors driving integration are likely specialty-specific; that Medicare payment policy is one factor that affects consolidation in provider markets; and that tougher antitrust policy would be wise."
Shoutout to @drusso in the comments:
Healthcare Reform Creates Provider Monopolies
"Still, in many communities, the independent physicians are significantly disadvantaged. They cannot negotiate the same higher reimbursement rates from insurance companies as their hospital-owned counterparts and must accept lower pay for the same services. Independent physicians are also out of the referral loop established by the hospitals. They have no direct funnel of patients and must forge strong relationships with other independent physicians to survive. Consequently, as referral dynamics change, many are forced to accept buyout offers from hospitals merely to stay open.
We’ve seen many, many times that when independent physician practices are acquired by hospitals, three things happen: Prices go up after the acquisition, total spending goes up, and referral patterns change. Hospitals pay the physicians and their staff the same salaries, but charge more for these services in their Hospital Outpatient Departments (HOPD’s), and pick up this additional revenue without adding value."
Original tweet thread link here:
"Vertical integration - where hospitals acquire physician practices - is on the rise, having increased by 20 percentage points or more in many specialties since 2007. While integration is associated with higher prices, current evidence suggests a limited association with quality. As a result, we’re not crazy about encouraging more of it. That’s why we wanted to study the role of Medicare payment in driving vertical integration. Site-based differentials involve Medicare paying higher fees after a practice integrates with a hospital, creating incentives for integration. We quantified the size of the site-based differential and explored heterogeneity in the responsiveness to this incentive across specialty. On average, Medicare payment for physician services would have been 80% higher (about $100,000 per physician per year) if a practice were hospital-owned compared to physician-owned; this payment disparity varied by specialty. This differential showed a modest association with hospital-physician integration that varied by specialty; surgical specialties showed no statistical relationship to the payment disparity, while primary care and medical specialties did. These results underscore that the factors driving integration are likely specialty-specific; that Medicare payment policy is one factor that affects consolidation in provider markets; and that tougher antitrust policy would be wise."
Shoutout to @drusso in the comments:
Healthcare Reform Creates Provider Monopolies
"Still, in many communities, the independent physicians are significantly disadvantaged. They cannot negotiate the same higher reimbursement rates from insurance companies as their hospital-owned counterparts and must accept lower pay for the same services. Independent physicians are also out of the referral loop established by the hospitals. They have no direct funnel of patients and must forge strong relationships with other independent physicians to survive. Consequently, as referral dynamics change, many are forced to accept buyout offers from hospitals merely to stay open.
We’ve seen many, many times that when independent physician practices are acquired by hospitals, three things happen: Prices go up after the acquisition, total spending goes up, and referral patterns change. Hospitals pay the physicians and their staff the same salaries, but charge more for these services in their Hospital Outpatient Departments (HOPD’s), and pick up this additional revenue without adding value."
