Quality improvements and lower costs have been touted as benefits of hospital-physician alignment, but such results are not guaranteed says a briefing released by the Center for Studying Health System Change (HSC), a nonpartisan health policy research organization.
"Even though hospitals are employing these physicians, that alone does not guarantee that quality will improve or that costs will stay level," says Ann O'Malley, MD, one of the authors of the brief, "Rising Hospital Employment of Physicians: Better Quality, Higher Costs?"
HSC's brief noted that hospital-physician alignment can, in theory, improve quality of care by encouraging integration of care and communication, however, getting everyone on the same page is more challenging in reality said respondents to HSC's Community Tracking Study, which informed the brief.
HSC's Community Tracking Study includes interviews with members of healthcare organizations in 12 metropolitan areas, including Boston, Phoenix, Seattle and Indianapolis. The responses for "Rising Hospital Employment of Physicians" came primarily from nearly 550 interviews with hospital chief executive officers, chief financial officers and chief medical offices as well as with physician organizations, health plans and market observers.
The brief said that to date, most coordination of care happens for a single diagnoses or condition rather than covering all a patient's medical needs and that communication between inpatient and outpatient providers – even if they are working within the same system – is a problem.
[See also: PwC says doctors, hospitals must work together.]
"You have to develop care processes within these systems if you really want to truly improve the quality of care for patients and improve efficiency," says O'Malley. "So to hire docs is not enough. They've got to go that next step and really work on the care processes to really integrate everybody to coordinate care for patients."
While much of the talk about hospital-physician alignment has been focused on how integration will reduce costs, HCS' brief says that unless payment reform changes things, integration may actually increase costs.
"The recent acceleration in hospital employment of physicians runs the risk of raising costs and not improving quality of care unless broader payment reform reduces incentives to increase volume and creates incentives for providers to change care delivery to achieve real efficiencies and higher quality," the brief concludes.
[See also: MedPAC report sustains critique of fee-for-service.]
The fee for service (FFS) payment model isn't necessarily the problem, says O'Malley, rather it's the way work is valued under FFS.
"Certain types of procedures, diagnostic testing, etc., get reimbursed at higher rates than some of the more cognitive based assessment and management of patients and things like coordination of care, which right now our system doesn't reimburse at all," says O'Malley. "It's not so much that fee for service by itself is evil, it's a combination of the volume incentive generated by a fee for service plus the way current services are valued under the existing fee for service system, how different types of services are valued."
"If eventually payment were to be reformed through (accountable care organizations) then this fee for service problem becomes less of an issue," she adds. "But in the short term, before that happens, it's a problem and that's one of the things we wanted to bring people's attention to."
Follow HFN associate editor Stephanie Bouchard on Twitter @SBouchardHFN.