A recent study by the Harvard T.H. Chan School of Public Health found that primary care physicians affiliated with large health systems are driving up spending on patient care. Contrary to claims by the hospital industry that consolidation leads to cost savings, this study suggests that these doctors are increasing spending by referring patients to specialists, directing them towards emergency department visits, and resulting in more hospitalizations.
The study in JAMA Health Forum analyzed data from several state provider databases, encompassing over 4 million patients in Massachusetts. It compared the utilization patterns of patients whose primary care physician had a vertical relationship with an extensive health system in 2015 or 2017, with patients whose doctors never had such an arrangement or had one from 2013 to 2017.
The findings revealed that patients whose doctors had vertical relationships had approximately a 23% increase in specialist visits and a 14% increase in emergency department visits per patient-year compared to the comparison group. This translated into a $357 increase in total medical expenditures per patient-year, a 6.26% increase versus the comparison group. Hospitalizations were also 22% higher among patients whose doctors were in vertical relationships during those years.
While acknowledging potential benefits such as enhanced care coordination, the authors noted that vertical consolidation could also result in directing care to higher-cost physicians and facilities without improvements in quality. The authors recommended countermeasures such as antitrust enforcement, adopting tools that encourage patients to seek care from lower-cost options, and utilizing alternate payment models that incentivize cost-effective care.
Overall, this study challenges the notion that consolidation within the hospital industry leads to cost-saving efficiencies and highlights the potential consequences of primary care physicians being affiliated with large health systems. For more affordable healthcare for your business, schedule a call.