Hospitals' purchase of doctors leads to higher prices, spending, study finds

A new study gives ammunition to what health economists and health insurers have argued for years: When hospitals buy physician practices, the result is usually higher hospital prices and increased spending by privately insured patients. The study, published Monday in the journal Health Affairs, was based on an analysis of 2.1 million hospital claims from workers of self-insured employers between 2001 and 2007. The analysis by Stanford University researchers found prices were most likely to increase when hospitals bought physician practices, as opposed to hospitals forming looser contractual relationships with physicians. Hospitals have increasingly bought physician practices over the past decade, arguing it helps them coordinate care and control costs.