Posted on October 13, 2016
Trend: Hospital Ownership of Physician Practices Continues to Increase
The number of US physician practices owned by hospitals is rising
rapidly, as changes in medical payment systems prompt providers to seek
efficiencies through new operational structures. Some 31,000 practices
were acquired by hospital groups between 2012 and 2015, leading to an
86% jump in the number of hospital-owned doctors' offices, according to a
recent study from Avalere Health and the Physicians Advocacy Institute
(PAI). Nearly 40% of physicians in the US are employed by hospitals or
health systems. Typical acquisitions include employment contracts for
multiple physicians' services, along with physical property and
equipment. The study found that Medicare payments for some common
outpatient hospital services are up to three times higher than if they'd
been performed at a physician-owned office, leading to concerns that
the acquisition trend could drive up health care costs for payers.
Health providers are consolidating to get a better handle on revenue streams, reduce costs, and control risk. Federal programs looking to control costs may further alter payment systems if consolidation is found to increase medical spending.
US consumer prices for medical care commodities, an indicator of
healthcare costs, increased 4.5% in August 2016 compared to the same
period in 2015.
US consumer prices for medical care services, an indicator of profitability for healthcare services, rose 5.1% in August 2016 compared to the same month in 2015.
Total US revenue for healthcare and social assistance rose 6.7% in the second quarter of 2016 compared to the previous year.