We already knew that when hospitals combine with each other, they raise the cost of health care—but a new study confirms that cost spikes also happen when hospitals acquire previously independent physician practices. According to a new study from UC Berkeley researchers, published in the Journal of the American Medical Association, these kind of acquisitions in California raised costs by 10 to 20 percent. These higher costs then are absorbed by consumers and taxpayers (who fund subsidies) in the form of higher premiums and higher deductibles. The LA Times has more:
Total spending per patient was 10.3% higher for hospital-owned physician offices compared with doctor-owned organizations, according to the study.Costs were even higher when large health systems running multiple hospitals owned medical groups. Their per-patient spending was 19.8% higher compared with independent physician groups.Mergers between hospitals and physician groups often are touted as a way to coordinate care better, eliminate unnecessary tests and treatments and ultimately reduce costs. Provisions of the Affordable Care Act encourage healthcare providers to collaborate more and shift away from conventional fee-for-service medicine.
It’s not clear exactly how common these acquisitions will become. One study by Merritt Hawkins found that 2014 will see 75 percent of newly hired doctors working for hospitals. Other studies point in different directions. But it’s clear that more consolidation will happen, at whatever rate, and that the ACA is contributing to the momentum behind these acquisitions. The ACA was pitched as a way to save the U.S. some health care dollars, but in this case at least it is accelerating one of the worst trends currently increasing the cost of U.S. health care year on year.