Hospitals are employing more physicians, but this does not necessarily improve care

1. No association was found between hospitals with a physician employment model and improvements in patient care.  

2. Large, teaching hospitals were more likely to switch to a physician employment model, compared to smaller, for-profit institutions.

Evidence Rating Level: 2 (Good)

Study Rundown: U.S. hospitals were traditionally viewed as “workshops” for physicians, where physicians were reimbursed separately from the hospital. Recently, interest has been growing among policymakers to move towards vertical integration—in the form of hospital-physician employment—with the goals to improve patient care and potentially decrease health care spending. The authors of this study sought to characterize current hospitals employing such a policy and examine the clinical consequence of this switch on the quality and efficiency of patient care. Generally, they observed an increase in hospitals employing members of their physician workforce from 2003-2012. Despite this increase, however, no association was found between switching to an employment model and improvement of patient care. This study has several limitations. First, performance was measured up to 2 years after each hospital switched to an employment model; beneficial effects, however, may take longer to appear. Additionally, the study only examined patient care outcomes in an older population (Medicare beneficiaries ≥ 65 years); the results may not be applicable to a younger adult cohort or pediatric population. Overall, this study suggests that while a greater number of hospitals are switching to physician employment models, this intervention alone is not sufficient to improve the quality of hospital-based patient care.

Click to read the study, published today in Annals of Internal Medicine

Relevant Reading: Vertical Integration: Hospital Ownership Of Physician Practices Is Associated With Higher Prices And Spending

In-Depth [retrospective cohort]: In this retrospective cohort study, the authors used the American Hospital Association (AHA) annual surveys from 2003 to 2012 to characterize hospitals having switched to a physician employment model. Specifically, 803 switching hospitals were compared with 2085 non-switching control hospitals matched for both year and region. 4 primary outcome variables were measured to determine the effect of physician employment on patient care: risk-adjusted hospital-level mortality rates, 30-day readmission rates, length of stay, and patient satisfaction scores for common medical conditions. 29% of hospitals were found to have an employment relationship with physicians in 2003, compared to 42% in 2012. Furthermore, switching hospitals compared to non-switching hospitals were more often large (11.6% versus 7.1%, p < 0.001), major teaching hospitals (7.5% vs. 4.5%, p < 0.001), and less often for-profit institutions (8.8% vs. 19.9%, p < 0.001). No significant differences were observed between switching and non-switching hospitals in terms of any of the four primary outcomes in patient care.

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