Quality of care isn't better at physician-employed hospitals, study shows

Hospitals that employ physicians don't perform any better than other hospitals on certain quality measures, according to a new study.

The study, recently in the journal Medical Care Research and Review, also found that hospitals in concentrated markets reported lower patient satisfaction scores.

"There are less incentives to keep patients happy when they don't have a competitor down the road to go to," said Marah Short, lead author of the study and associate director of the Center for Health and Biosciences at Rice University's Baker Institute for Public Policy.

To get the results, the study assessed the performance of 4,438 hospitals on 29 quality measures reported on Hospital Compare from 2008 to 2015. The authors found hospitals with employed physicians performed similarly as non-physician-employed hospitals on all of the 29 quality measures except for two after stricter analysis criteria was applied. The two measures were adherence to the continuation of beta blockers and readmissions for pneumonia patients.

Short said she expected to find that hospitals with a high percentage of employed physicians would report better quality scores because care was likely less fragmented and more coordinated. Instead, she found the hospitals weren't doing any better or worse than hospitals who contract with physicians. Other studies have found similar results but looked at smaller populations.

The process measures are widely accepted and followed by hospitals, which also may lead to fewer performance discrepancies, Short said. The measures include giving a patient discharge instructions and giving patients antibiotics before and after surgery.

The findings come as independent physician practices merging with hospitals hits an all-time high. There were about 155,000 hospital-employed physicians in 2016, up 63% from 95,000 in 2012. While independent physicians have incentives to join large systems as regulatory compliance grows more challenging, health systems usually want to acquire physician practices so they can align physician networks to improve outcomes in value-based payment arrangements.

Because physicians integrating with hospitals didn't improve quality, Short said she's interested in exploring if the relationships have led to price increases. Previous research by consultancy Avalere Health found a correlation between increased physician employment by hospitals and a rise in Medicare costs for healthcare services.

"Physician-hospital integration did not improve the quality of care for the overwhelming majority of these measures. If patient welfare doesn't improve after integration, there may be other reasons why physicians and hospitals are forming closer relationships — perhaps to raise profits," said Vivian Ho, co-author of the study and the director of the Center for Health and Biosciences at Rice University.