Physician Competition in the Era of Accountable Care Organizations

Trends in Orthopedic Surgeon Practice Consolidation From 2008 to 2019

BACKGROUND

In the past decade, physician practices have merged into larger group practices (ie, horizontal consolidation) and have been acquired by hospitals and health systems (ie, vertical consolidation), leaving fewer practices independent. The implications of these changes can be profound, affecting the prices for and spending on physician services, access to care, patients' choice of providers, and quality of care.

METHODS

We used IQVIA data on orthopedic surgeon practice sites that included information on health system or hospital ownership, group medical practice participation, and average patient volume. We calculated the number and size of group medical practices as measures of horizontal consolidation and the percentage of practice sites owned by a health system or hospital as a measure of vertical consolidation. We also calculated the Herfindahl-Hirschman Index to measure market concentration.

RESULTS

We found significant horizontal and vertical consolidation nationally and across all regions of the United States. This consolidation has led to much more concentrated markets, as measured by Herfindahl-Hirschman Index, for orthopedic surgeon services. These trends are consistent with studies looking at consolidation of other types of providers.

CONCLUSION

Orthopedic surgeon practices, like other provider types, have consolidated at a rapid rate over the past decade. A variety of factors may have contributed, including the move away from fee-for-service to alternative payment arrangements, changes in Medicare payment policies, private equity activity, and evolving physician preferences. Due to the potential impacts of this consolidation, more research is needed to examine some of these contributing factors.

Breadth and Exclusivity of Hospital and Physician Networks in US Insurance Markets

Importance

Little is known about the breadth of health care networks or the degree to which different insurers' networks overlap.

Objective

To quantify network breadth and exclusivity (ie, overlap) among primary care physician (PCP), cardiology, and general acute care hospital networks for employer-based (large group and small group), individually purchased (marketplace), Medicare Advantage (MA), and Medicaid managed care (MMC) plans.

Design, Setting, and Participants

This cross-sectional study included 1192 networks from Vericred. The analytic unit was the network-zip code-clinician type-market, which captured attributes of networks from the perspective of a hypothetical patient seeking access to in-network clinicians or hospitals within a 60-minute drive.

Exposures

Enrollment in a private insurance plan.

Main Outcomes and Measures

Percentage of in-network physicians and/or hospitals within a 60-minute drive from a hypothetical patient in a given zip code (breadth). Number of physicians and/or hospitals within each network that overlapped with other insurers' networks, expressed as a percentage of the total possible number of shared connections (exclusivity). Descriptive statistics (mean, quantiles) were produced overall and by network breadth category, as follows: extra-small (<10%), small (10%-25%), medium (25%-40%), large (40%-60%), and extra-large (>60%). Networks were analyzed by insurance type, state, and insurance, physician, and/or hospital market concentration level, as measured by the Hirschman-Herfindahl index.

Results

Across all US zip code-network observations, 415 549 of 511 143 large-group PCP networks (81%) were large or extra-large compared with 138 485 of 202 702 MA (68%), 191 918 of 318 082 small-group (60%), 60 425 of 149 841 marketplace (40%), and 21 781 of 66 370 MMC (40%) networks. Large-group employer networks had broader coverage than all other network plans (mean [SD] PCP breadth: large-group employer-based plans, 57.3% [20.1]; small-group employer-based plans, 45.7% [21.4]; marketplace, 36,4% [21.2]; MMC, 32.3% [19.3]; MA, 47.4% [18.3]). MMC networks were the least exclusive (a mean [SD] overlap of 61.3% [10.5] for PCPs, 66.5% [9.8] for cardiology, and 60.2% [12.3] for hospitals). Networks were narrowest (mean [SD] breadth 42.4% [16.9]) and most exclusive (mean [SD] overlap 47.7% [23.0]) in California and broadest (79.9% [16.6]) and least exclusive (71.1% [14.6]) in Nebraska. Rising levels of insurer and market concentration were associated with broader and less exclusive networks. Markets with concentrated primary care and insurance markets had the broadest (median [interquartile range {IQR}], 75.0% [60.0%-83.1%]) and least exclusive (median [IQR], 63.7% [52.4%-73.7%]) primary care networks among large-group commercial plans, while markets with least concentration had the narrowest (median [IQR], 54.6% [46.8%-67.6%]) and most exclusive (median [IQR], 49.4% [41.9%-56.9%]) networks.

Conclusions and Relevance

In this study, narrower health care networks had a relatively large degree of overlap with other networks in the same geographic area, while broader networks were associated with physician, hospital, and insurance market concentration. These results suggest that many patients could switch to a lower-cost, narrow network plan without losing in-network access to their PCP, although future research is needed to assess the implications for care quality and clinical integration across in-network health care professionals and facilities in narrow network plans.

Understanding Medicare ACO Adoption in the Context of Market Factors

Medicare Accountable Care Organizations (ACOs) have achieved high-quality performance and recent cost savings, but little is known about how local market conditions influence provider adoption. The authors describe physician practice participation in Medicare ACOs at the county level and use adjusted logistic regression to assess the association between ACO presence and 3 characteristics hypothesized to influence ACO formation: physician market concentration, Medicare Advantage (MA) penetration, and commercial health insurance market concentration. Analyses are repeated on urban and rural county subgroups to examine geographic differences in ACO adoption. Practice participation in ACOs grew 19% nationally from 5.4% to 6.4% of practices between 2015 to 2017, but participation lagged in the West and rural counties, the latter of which had relatively concentrated physician markets and low MA penetration. After controlling for urban location, population density, and other covariates, ACO presence in a county was independently associated with less concentrated physician markets and moderate MA penetration but not commercial insurance concentration. The evidence suggests that Medicare ACO programs have continued appeal to physician practices, but additional engagement strategies may be needed to expand adoption in rural areas. In addition, greater practice competition and MA experience may facilitate ACO adoption. These insights into the relationship between market conditions and ACO participation have important implications for policy efforts to accelerate Medicare payment transformation.

Clavien-Dindo Analysis of NSQIP Data Objectively Measures Patient-Focused Quality

Current quality measures intended to drive improved clinical performance are perceived as an inappropriate administrative burden. Surgeon-constructed quality measures, including the NSQIP, are more closely aligned with provider performance and relevant outcome. We hypothesized that NSQIP participation would be associated with measurable improvement in surgical outcomes. Elective general surgical cases were compared by case volume and incidence of postoperative adverse events (AEs) from 2014 to 2017. Using the Clavien-Dindo severity scaling system, we summed the grades for each AE and defined the patient population burden of these AEs as this sum divided by case volume. Case volume samples increased 67 per cent from 2014 (n = 526, 30 day complete) to 2017 (n = 878). Ratio of patient burden to case volume improved from 0.92 (2014) to 0.73 (2017). Comparison of AE incidence was not significantly different; however, the majority decreased over time. Analysis of individual AE interval change identified sepsis-related respiratory care as the top priority performance improvement target. These data reflect improved performance for a growing volume of surgical procedures. The impact of perioperative morbidity and their associated burden on affected patients has decreased, demonstrating the value of combining NSQIP with Clavien-Dindo to measure the quality of surgical care in objective and patient-specific terms.

Does Vertical Integration Improve Access to Surgical Care for Medicaid Beneficiaries?

BACKGROUND

Vertical integration is increasingly common among surgical specialties in the US; however, the effect of vertical integration on access to care for low-income populations remains poorly understood. We explored the characteristics of surgical practices associated with vertical integration and the effect of integration on surgical access for Medicaid populations.

STUDY DESIGN

Using a survey of US office-based physician practices, we examined characteristics of 15 surgical subspecialties from 2007 to 2017, including provider sex and specialty, practice payer mix, surgical volume, and county socioeconomic status. Using multivariable logistic regression and time-series analysis, we evaluated practice and provider characteristics associated with vertical integration-our primary outcome-and practice Medicaid acceptance rates-our secondary outcome.

RESULTS

Our analysis included 84,795 unique surgical practices (303,903 practice-years). The rate of vertical integration during the 10-year period was 18.0%, with 72.1% of surgical practices never integrating. Practices that integrated were more likely to accept Medicaid patients than practices that did not (81.0% vs 60.8%, p < 0.001). Accepting Medicaid increased the likelihood of vertical integration relative to practices that did not (odds ratio [OR] 4.20, 95% CI 3.93 to 4.49). Practices that integrated were more likely to accept Medicaid in the future (OR 2.61, 95% CI 2.40 to 2.83), even after adjusting for previous Medicaid acceptance and hospital and time fixed effects.

CONCLUSIONS

Surgical practices caring for the underinsured are more likely to join larger health care systems, driven by market characteristics. Vertical integration is associated with future increased rates of Medicaid acceptance among practices, allowing for increased access to surgical care for vulnerable, low-income patients. The potential benefit of increased surgical access for low-income beneficiaries from vertical integration must be balanced with the potential for increased prices.

Horizontal and vertical integration's role in meaningful use attestation over time

OBJECTIVE

To compare rates of attestation and attrition from the MU program by independent, horizontally integrated, and vertically integrated physicians and to assess whether MU created pressure for independent physicians to join integrated organizations.

DATA SOURCE/STUDY SETTING

Secondary Data from SK&A and Medicare MU Files, 2011-2016. Office-based physicians in the 50 United States and District of Columbia.

STUDY DESIGN

We compared attestation rates among physicians that remained independent or integrated throughout the study period. We then assessed the association between changing integration and MU attestation in multivariate regression models.

PRINCIPAL FINDINGS

Our sample included 291 234 physicians. Forty nine percent of physicians that remained independent throughout the period attested to MU at least once during the program, compared with 70 percent of physicians that remained horizontally or vertically integrated physicians. Only approximately 50 percent of independent physicians that attested between 2011 and 2013 attested in 2015, representing significantly more attrition than we observed among integrated physicians. In multivariate regression models, physicians that joined these organizations were more likely to have attested to MU prior to integrating and this difference increased following integration.

CONCLUSIONS

These findings point toward a growing digital divide between physicians who remain independent and integrated physicians that may have been exacerbated by the MU program. Targeted public policy, such as new regional extension centers, should be considered to address this disparity.

Assessing the relationship between healthcare market competition and medical care quality under Taiwan's National Health Insurance programme

Background

There is still significant uncertainty as to whether market competition raises or lowers clinical quality in publicly funded healthcare systems. We attempted to assess the effects of market competition on inpatient care quality of stroke patients in a retrospective study of the universal single-payer health insurance system in Taiwan.

Methods

In this 11-year population-based study, we conducted a pooled time-series cross-sectional analysis with a fixed-effects model and the Hausman test approach by utilizing two nationwide datasets: the National Health Insurance Research Database and the National Hospital and Services Survey in Taiwan. Patients who were admitted to a hospital for ischemic or hemorrhagic stroke were enrolled. After excluding patients with a previous history of stroke and those with different types of stroke, 247 379 ischemic and 79 741 hemorrhagic stroke patients were included in our analysis. Four outcome indicators were applied: the in-hospital mortality rate, 30-day post-operative complication rate, 14-day re-admission rate and 30-day re-admission rate.

Results

Market competition exerted a negative or negligible effect on the medical care quality of stroke patients. Compared to hospitals located in a highly competitive market, in-hospital mortality rates for hemorrhagic stroke patients were significantly lower in moderately (β = -0.05, P < 0.01) and less competitive markets (β = -0.05, P < 0.01). Conversely, the impact of market competition on the quality of care of ischemic stroke patients was insignificant.

Conclusions

Simply fostering market competition might not achieve the objective of improving the quality of health care. Other health policy actions need to be contemplated.