January 17, 2020
2 min read

More physicians entering large, hospital-owned practices

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More physicians are entering large or hospital-owned practices and leaving independent or smaller practices, according to findings published in the Annals of Internal Medicine.

“The practice settings of newer physicians may differ from those of their predecessors for many reasons, including increasing administrative costs of independent practice, pressure from payers to bear risk, preference for exible call schedules, and changes in employment opportunities as providers consolidate into larger organizations,” Hannah T. Neprash, PhD, assistant professor in the School of Public Health at the University of Minnesota, and colleagues wrote.

Neprash and colleagues analyzed Medicare carrier claims from a random 20% sample of beneficiaries from 2008 to 2017.

Physicians absent from claims in 2008 who billed Medicare for the first time in later years were considered “entering physicians.” Those who billed Medicare in 2008 but stopped in later years and had no additional claims through 2017 were considered “exiting physicians.” Practice settings were assessed for the physicians’ first and last years of billing Medicare.

More physicians are entering large or hospital-owned practices and leaving independent or smaller practices, according to findings published in the Annals of Internal Medicine.
Source: Shutterstock

Researchers determined physician practice size through the number of physicians who billed using the same taxpayer identification number. If 90% or more of physicians’ outpatient claims listed the service location as a hospital outpatient department, they were considered as working in a hospital-owned setting.

A total of 630,979 physicians were evaluated in the study. Between 2009 and 2016, the share of physicians in large practices grew from 32.1% to 48.8%, and the share of those is hospital-owned practices grew from 18.8% to 25.8%.

Within the sample, 19% were considered entering physicians and had a median age of 35 years. Exiting physicians, who had a median age of 65 years, accounted for 12.4% of the sample.

Entering physicians were more likely than exiting physicians to work in large group practices (58.4% vs. 34.6%) and hospital-owned settings (38.3% vs. 20.9%).

Entering physicians replaced exiting physicians at a ratio of 0.33:1 in the smallest practices, 2.58:1 in the largest practices, and 2.8:1 in hospital-owned practices.

For those specializing in internal medicine, the replacement ratio was 0.29:1 in the smallest practices, 3.9:1 in the largest practices, and 6.5:1 in hospital-owned practices. Among physicians in family practice, the ratio was 0.41:1 in the smallest practices, 2.38:1 in the largest practices, and 2.84:1 in hospital-owned practices.

“Larger physician groups and integration between physicians and hospitals are associated with price and spending increases, but few discernible quality improvements,” Neprash and colleagues wrote.

They noted that to help promote competition between large and small practices, policymakers should consider payment policies that make entering independent practice more appealing to physicians. – by Erin Michael

Disclosures: Neprash reports grants from Arnold Ventures during the conduct of the study. Please see study for all other authors’ relevant financial disclosures.