Research tells different story about impact of hospital-employed docs
The article “Hospital-employed physicians drain Medicare” (Mod ernHealthcare.com, Nov. 14) suggests that the employment relationships between hospitals and physicians coupled with hospital consolidation are drivers of increased cost of care for patients. Recent research on the subject tells a much different story.
A study conducted earlier this year by economists at Charles River Associates, or CRA, found that hospital mergers can result in efficiencies that unleash savings and innovation. While the CRA study largely focused on mergers between hospitals, the CEOs surveyed noted that creating systems along the continuum of care, which includes relationships between physicians and hospitals, was also necessary to manage the changing demands of healthcare.
Physicians and hospitals alike are working together in new ways due to these changes. According to the study, acquired hospitals were able to cut annual operating expenses by 2.5%—or $5.8 million. The ultimate marker of success for these new models of care will be if patients have a better experience, improved health and a lower per capita cost compared with current models.
The article disregards patient choice, severity of illness or availability of services within some communities. It implies that patients pay more for procedures performed in outpatient settings, ignoring that provider-based departments, or PBDs, offer services that are not otherwise available in the community to vulnerable patient populations.
Relative to patients seen in physician offices, patients seen in PBDs are 2.5 times more likely to be Medicaid, selfpay or charity patients; 1.8 times more likely to be dually eligible for Medicare and Medicaid; 1.8 times more likely to live in high-poverty areas; and 1.7 times more likely to live in low-income areas. In addition, oftentimes these patients are too sick for physician offices or too medically complex for ambulatory surgery centers. Physicians refer more complex patients to PBDs for safety reasons, as hospitals are better equipped to handle complications and emergencies.
Hospitals and physicians are developing new strategies to improve care delivery and meet the needs of the communities they mutually serve.
Melinda Reid Hatton Senior vice president, general counsel American Hospital Association