Hospital-employed physicians drain Medicare

www.modernhealthcare.com | 11/14/2017 | Staff
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Healthcare costs for four common procedures are rising as hospitals and health systems employ more physicians, according to a new study.

A 49% increase in hospital-employed physicians between 2012 and 2015 led to a $3.1 billion increase in Medicare costs related to four specific procedures in cardiology, orthopedics and gastroenterology, according to analysis from consulting firm Avalere Health.

Medicare - Catheterizations - Echocardiograms - Arthrocentesis - Colonoscopies

Medicare paid $2.7 billion more for diagnostic cardiac catheterizations, echocardiograms, arthrocentesis and colonoscopies delivered in hospital outpatient settings than it would for treatment in independent facilities, while beneficiaries footed a $411 million higher bill.

Hospital-employed physicians performed more services in costlier hospital outpatient settings, resulting in up to 27% higher costs for Medicare and 21% for patients. For some of the procedures studied, employed physicians were seven times more likely to provide more services in a hospital outpatient setting than an independent physician's office, which contradicts healthcare's developing value-added mantra.

Employment - Trend - Care - Locations - Robert

The employment trend seems to have shifted care to higher-cost locations, which is concerning, said Robert Seligson, president of the Physicians Advocacy Institute, which published the study last week. But the potential impact on quality still needs to be explored, he said.

"Hospital consolidation pushes healthcare costs upward," Seligson said. "The impact of hospitals owning outpatient practices places a greater financial burden on Medicare beneficiaries and on taxpayers."

Physicians - Organizations - Cases - Health - Systems

More physicians are joining larger organizations, in many cases major health systems, to take some of the uncertainty out of their business. Rising compliance costs related to satisfying new payment models, growing administrative burdens for managing data and documentation, and Medicare and Medicaid's lower reimbursement levels, are unsettling independent physicians and putting their practices in jeopardy.

As employees of larger organizations, they may benefit from higher reimbursement for services performed in the system, a streamlined administrative process, an integrated model that can better tackle population health, and...
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