Modern Healthcare March 3, 2018
The hospital systems buying physician practices say vertical integration will facilitate care coordination and lower costs.
Where’s the evidence?
If consolidation immediately lowered costs, hospital groups wouldn’t be fighting so hard to fend off the CMS’ proposal to install site-neutral payments for tests and procedures done in outpatient settings. While the rates at hospital-acquired physician practices have been cut, they still get higher fees than practices that remain under physician compensation rules.
Moreover, the upward arc of physician compensation, the largest expense in any practice, hasn’t moderated with the growth of hospital-employed physicians. Contrary to the fears of many physicians caught up in the consolidation wave, hospital administrators continue to grant most specialties pay hikes that outpace inflation by a...
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