Physician alignment falling short?

Hospital employment of physicians has accelerated in recent years. And while the intentions may be noble, the results fall short. That’s the conclusion of the authors of a recent study published by the Center for Studying Health System Change, Washington, D.C.


True, greater physician alignment with hospitals has the potential to improve quality through better clinical integration and care coordination. But it doesn’t necessarily guarantee that such clinical integration will occur, according to the study’s authors. What’s more, alignment could actually lead to increased costs in the form of higher hospital and physician commercial insurance payment rates. In addition, some employed physicians are reporting hospital pressure to order more expensive care.


The authors based their conclusions on site visits to 12 metropolitan communities: Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey; Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y.


SUBHEAD: Clinical integration?


Today, most clinical-process integration is focused on single diagnoses or conditions rather than integration across all of a patient’s medical needs, according to the study. Hospitals appear to be focusing on “low-hanging fruit,” such as reducing preventable readmissions among patients hospitalized for congestive heart failure.


Communication between inpatient and outpatient providers, even between those employed by the same hospital system, continues to be a problem, according to the study. “Hospital systems and clinicians vary widely in their development of integrated care processes and implementation of interoperable electronic health records.”


Potential for higher costs


Physician/hospital alignment can actually lead to higher costs, point out the study’s authors. That’s true for several reasons:

  • Incentives to provide more services and increase productivity.
  • Facility fees charged by hospitals.
  • Greater leverage with payers.


“While hospital-employed physicians may spur clinical integration that will ultimately improve efficiency and help control costs, they are more likely to increase costs in the short run,” conclude the study’s authors. One reason is that hospitals and their employed physicians continue to practice in a predominantly fee-for-service environment, with incentives to increase the volume of services delivered.


Another reason that hospital/physician alignment might lead to higher costs is the fact that hospitals routinely charge facility fees for office visits and procedures performed in formerly independent physicians’ offices. As a result, patients and payers may end up paying more for procedures delivered by employed physicians, even if those procedures are performed by the same formerly independent doctor in the same office building.


The third reason that alignment might lead to higher costs is the fact that it gives hospitals and physicians more leverage in their negotiations with health plans.


On the plus side, physician/hospital alignment can lead to better access to employed specialists for low-income patients, especially those with Medicaid coverage, according to the Center for Studying Health System Change. But there’s a downside attached even to that: Access to care can be adversely affected for patients when a major hospital system drops out of a health plan network.


To view the study, go to


For more from the January digital edition of JHC, visit


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