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Outpatient Spending Higher With Physician-Hospital Integration

Authors say increased spending attributable to price increases, not utilization changes

TUESDAY, Oct. 20, 2015 (HealthDay News) — Markets with greater increases in physician-hospital integration show greater increases in spending for outpatient care, but not inpatient care, for a large commercially insured population, according to a study published online Oct. 19 in JAMA Internal Medicine.

Hannah T. Neprash, from Harvard Medical School in Boston, and colleagues analyzed the association between recent increases in physician-hospital integration and changes in spending and prices for outpatient and inpatient services between Jan. 1, 2008, and Dec. 31, 2012, in 240 metropolitan statistical areas (MSAs). Medicare claims data were used to measure physician-hospital integration as the share of physicians in an MSA who bill for outpatient services with a place-of-service code indicating employment or practice ownership by a hospital.

The researchers found that physician-hospital integration increased by a mean of 3.3 percentage points, with considerable variation across MSAs. Based on a sample of 7,391,335 nonelderly enrollees, an increase in physician-hospital integration equivalent to the 75th percentile of changes experienced by MSAs was tied to a mean increase of $75 per enrollee in annual outpatient spending (P < 0.001), a 3.1 percent increase relative to mean outpatient spending in 2012 ($2,407 per enrollee). Associated changes in utilization were minimal, making the increase in outpatient spending almost entirely driven by price increases. There were no significant changes in inpatient spending associated with changes in physician-hospital integration (P = 0.06) or utilization (P = 0.37).

“Financial integration between physicians and hospitals has been associated with higher commercial prices and spending for outpatient care,” the authors write.

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