Rising costs, low-value care linked to hospital-employed physicians, studies show

Healthcare costs and low-value care tend to increase when hospitals acquire physicians, new studies published in Health Affairs show.

The number of diagnostic and lab tests performed in hospitals versus unaffiliated facilities increased after doctors were acquired by hospitals, which inflated healthcare costs, according to an analysis of 30 million imaging procedures and 341 million lab tests billed to Medicare. While more tests could benefit patients, physicians employed by hospitals were more likely to order inappropriate magnetic resonance imaging tests, a companion analysis of the commercial claims associated with 583 primary-care doctors who transitioned from independent practice to hospital employment found.

“There has been a defining shift in the way healthcare services are organized and managed,” said Gary Young, the lead author of the value-oriented study and director of the Center for Health Policy and Healthcare Research at Northeastern University. “Vertical integration represents one of the most important changes in how healthcare services are delivered, and we need to pay attention to the implications.”

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