Physician Integration May Increase Costs, Poll Finds

A new poll conducted by the American College of Physician Executives (ACPE) reveals that the trend of physician integration may drive up costs, rather than decrease it through increased efficiency and streamlining care. Thirty-two percent of the 459 organizations surveyed said the costs of delivering healthcare went up after a hospital or health system bought a group or practice.  

Of those surveyed, 16 percent said costs remained the same, while only 5 percent said costs decreased. Twelve percent were unsure, while the remainder said the situation wasn't applicable. Many said that the cost increase is temporary and will change once they switch from a volume-based reimbursement model to one focused on value and quality of care.

Also, while the cost of healthcare may go up with integration, it does bring benefits. "Our costs and charges are indeed higher with physician employment than without," David McDermott, M.D., the director of emergency services at Mayo Regional Hospital in Dover-Foxcroft, Maine, said in a statement. "However, in rural Maine, if there was not hospital employment of physicians, the physicians would not be here. Costs have risen but we now have access."

In February, Healthcare Informatics looked at how the era of merged hospitals and physician practices is affecting infrastructure and technology. In that piece, it was revealed that integration for CIOs involved overseeing the harmonization of multiple systems and staffs.