When doctors ‘steer’ patients toward affiliated health systems, costs increase
The growing consolidation between primary care practices and large health systems corresponded with insurers paying more for the same types of care visits, according to a new JAMA study.
“There are both potential social benefits and adverse consequences to vertical consolidation,” according to a study published in JAMA Health Forum. “Physician–health system relationships may facilitate enhanced care coordination and communication among physicians and hospitals, which could play a role in lower duplicative testing or avoidable emergency department visits and thereby increase quality of care and decrease spending. Conversely, disrupting referral patterns could be associated with interrupted patient-physician relationships and lower quality.”
Researchers analyzed how vertical relationships between primary care physicians and large health systems, which include specialists and hospitals, are associated with changes in ambulatory and acute care utilization, referral patterns, readmissions and total medical spending for commercially insured individuals in Massachusetts.
“The dominant changes were those that we characterized as steering,” the report said. “Specialist visits, emergency department visits and hospitalizations rendered by the associated large health systems increased when the primary care physician became owned or affiliated with the health system. We also observed some potential inducement. The overall specialist physician visits increased, which raises the possibility of primary care physicians who are integrated with large health systems making a specialist referral, all else being equal.”
Primary care physician-health system vertical relationships were associated with increased total medical spending per patient year, but there was no evidence to suggest that these vertical relationships had a role in reduced readmissions or in directing patients to hospitals with lower readmission rates.
“Steering is not necessarily a factor in lower-quality care,” according to the report. “It is possible that there is better coordination and less redundancy when care across the continuum is delivered within a health system, which could be associated with higher quality and reduced costs. However, the finding of no change in patient readmissions might suggest limited gains from increased coordination.”
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Overall, vertical relationships appeared to be no panacea to health-care access or coordination.
“Policymakers, regulators and purchasers may need to consider adopting a portfolio of countermeasures to limit the adverse implications of vertical relationships for the total cost of care,” the report concluded. “These countermeasures include antitrust enforcement, adoption of transparency and patient steering tools that encourage patients to seek care from lower-cost physicians and hospitals, and alternative payment models that reward use of lower-priced care.”