(This story was updated on Sept. 3, 2015.)
When patients have to go to the hospital, they're likely to choose a facility where their doctor is employed, a new study suggests.
The study surveyed Medicare patients who are treated by hospital-employed doctors. Hospital ownership of doctors' medical groups “dramatically increases” the probability that those patients will go to the hospitals that employ their doctors, report Stanford University's Lawrence Baker, Daniel Kessler and Kate Bundorf in a working paper for the National Bureau of Economic Research, a not-for-profit research organization.
That matters because a growing number of physicians are working more closely with hospitals under contracts with financial incentives to do so. That has the potential to improve the quality of care and reduce healthcare costs as hospitals and doctors better coordinate care, but that may not always be the case, said Baker, a Stanford professor of health research and policy.
The researchers also looked at hospital cost and quality of care and where patients ended up. Patients of independent doctors—doctors not employed by hospitals—were more likely to choose low-cost and high-quality hospitals. “By contrast, patients are more likely to choose a high-cost, low-quality hospital when their admitting physician's practice is owned by that hospital,” the researchers wrote.
Baker stressed the results reflect an average. Close integration between hospitals and doctors can improve the quality and cost of care. “We know we need to get better delivery systems,” he said. “We know we can all benefit.”
But the results suggest achieving those goals is a challenge since public policy under the Affordable Care Act encourages more widespread integration, he said.
The ACA includes new financial incentives for hospitals (PDF) to work more closely with physicians, to form accountable care organizations and facilitate bundled payments. Accountable care rewards hospitals and doctors that can meet quality targets and hold down patients' medical costs. Results so far are mixed and in two years, just one-quarter of ACOs have earned rewards for reducing medical costs.
The paper offers preliminary evidence that success integrating some organizations doesn't indicate it works everywhere, said Cory Capps, a partner with Bates White Economic Consulting. The research, which is a working paper that has not been formally reviewed for publication by the bureau, is limited by one year of data that compared hospitalization of patients whose doctors were employed versus patients whose doctors' were independent. But the study nonetheless raised valuable questions, Capps said.
“We should not assume that it works all of the time or even most of the time,” said Capps, who co-authored a research study that found physician prices increase 14%, on average, after hospitals acquired physicians and that total spending did not decrease.
Total spending may decrease if physician care prevents disease or complications that require additional treatment or avoidable hospitalizations.
Proponents of integration say greater coordination among doctors and hospitals could help patients remain healthy or better manage disease and keep them out of hospitals.
Two of the authors disclosed financial ties to the industry. Baker and Kessler have been consultants to integrated delivery systems. Baker has consulted for Kaiser Permanente and been called as an expert in healthcare legal cases. Kessler has been paid to speak or consult for America's Health Insurance Plans, an insurance trade group, and for health insurers. The AHIP Foundation has also awarded Kessler grant money.
