Is Physician Integration Driving Up the Cost of Care?

Rene Letourneau, for HealthLeaders Media , July 15, 2013

Few physician executives believe costs go down when healthcare systems acquire physician practices. We asked doctors with divergent views to explain their positions.

What happens to healthcare costs when a physicians practice is sold to a hospital system?

The American College of Physician Executives last week released the results of its recent poll in which it asked its members about the effect on the cost of care when a health system buys a physician practice. Of the 469 respondents, 32% said care costs increase, while only 4.7% said costs go down. Sixteen percent said costs remain the same, 12% were unsure, and 34.8% said the question was not applicable to their organization.

With most healthcare institutions on a mission to drive down the cost of the care they provide, these poll results may be cause for concern among financial administrators.

Peter Angood, MD, and CEO of the ACPE, however, thinks the outlook may not be so dire. The higher costs may be due to the initial investment in the resources that are required to integrate a physician group with the larger health system rather than a long-term uptick, he says.

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