Clinical Integration

What are the financial implications of physician/hospital integration?

With the growing trend towards clinical integration to accommodate the new payment programs under the value-based care we are seeing an increased number of physicians transitioning to hospital employment vs private practice. According to a study by the Physicians Advocacy Institute in 2016 there was a 63% increase to about 155,000 employed physicians as compared to 2012 with only 95,000 employed through a hospital. Value-based care is centered on quality and patient outcomes which is determined based on data that pulls from software; costly software and must be monitored. Most private physician’s do not have the financial resources to purchase and maintain so they stand the chance of losing money. Private physician’s view all of the changes with now having to report the information required to receive payments as having a negative impact on the actual time they are able to spend with their patients. As the number of employed hospital physicians rises so does the number of hospital outpatient department procedures and visits. The Physician Advisory study stated that “Medicare paid $2.7 billion more for services performed in hospital outpatient settings than if they were done in independent physician offices”. CMS is proposing to make payments for hospital outpatient services the same as a doctor’s office services. This would have a profound impact on large health systems since almost half of their revenue is generated from outpatient services and procedures.

https://www.healthcaredive.com/news/cms-proposed-rule-extends-340b-cuts-encourages-site-neutrality/528625/
http://www.physiciansadvocacyinstitute.org/Portals/0/assets/docs/021919-Avalere-PAI-Physician-Employment-Trends-Study-2018-Update.pdf?ver=2019-02-19-162735-117

Published by Betty Rutherford

Motivated, analytical and results-focused professional with more than 20 years of experience driving results in complex and fast-paced healthcare environments. Reputation for establishing priorities, scheduling, and meeting deadlines through the skillful allocation of human and information technology resources.

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