Economic evaluation of the impact of physician-hospital integration and physician boards on hospital expenditure per patient: A 5-year longitudinal study

BACKGROUND

This study aims to contribute to the ongoing policy and scholarly debate on physician-hospital integration (INT) and health care cost by providing evidence for the role of physician boards in mitigating hospital expenditure associated with INT.

METHODS

We conducted our study of the relationship between INT, physician boards, and hospital expenditure using data on hospitals in California. We obtained data from the Centers for Medicare and Medicaid Services, American Hospital Association, and California Office of Statewide Health Planning and Development from 2002 to 2006. A hospital fixed-effect ordinary least square (OLS) regression analysis was used.

RESULTS

Hospital expenditure was higher in a hospital with an integrated arrangement (e.g., a hospital that adopted an integrated salary model) than under other independent arrangements between physicians and hospitals, and the proportion of physician members on hospital boards negatively moderated the effect of integration on hospital expenditure.

CONCLUSIONS

Physician boards may provide a context that affords benefits that can reduce hospital expenditures under INT. This finding highlights the importance to having a supportive organizational design when implementing INT.

Are your physician-integration strategies sustainable?

Before embarking on a physician-integration strategy, hospitals and health systems should perform a detailed analysis of the following four critical areas to ensure that the strategy is competitive and sustainable: Strategic objectives; Financial resources; Requisite experience and functional capabilities; Organizational structure, culture, and commitment.

Integration without employment

Three models for hospital-physician alignment may offer hospitals for which large-scale physician employment is not practical the best means to prepare for payment changes under accountable care: Comanagement arrangements Clinical joint ventures Professional services agreements with performance incentives.

Making it work: characteristics of high-performing hospital-physician networks

Physician practice is in the midst of another historic change--from solo and small groups to large, hospital-sponsored employed-physician networks. The question remains as to whether these large, hospital-centric physician organizations are sustainable. This article examines the stress points that physicians and practice managers face as they find themselves thrust into new but often ill-defined business models. It offers insights and pathways to help them navigate the changes that will be necessary for these business models to survive, evolve, and thrive.

Delivery system reform tracking: a framework for understanding change

The health care delivery system is changing rapidly, with providers forming patient-centered medical homes and exploring the creation of accountable care organizations. Enactment of the Affordable Care Act will likely accelerate these changes. Significant delivery system reforms will simultaneously affect the structures, capabilities, incentives, and outcomes of the delivery system. With so many changes taking place at once, there is a need for a new tool to track progress at the community level. Many of the necessary data elements for a delivery system reform tracking tool are already being collected in various places and by different stakeholders. The authors propose that all elements be brought together in a unified whole to create a detailed picture of delivery system change. This brief provides a rationale for creating such a tool and presents a framework for doing so.

Relationship between patient panel characteristics and primary care physician clinical performance rankings

CONTEXT

Physicians have increasingly become the focus of clinical performance measurement.

OBJECTIVE

To investigate the relationship between patient panel characteristics and relative physician clinical performance rankings within a large academic primary care network.

DESIGN, SETTING, AND PARTICIPANTS

Cohort study using data from 125,303 adult patients who had visited any of the 9 hospital-affiliated practices or 4 community health centers between January 1, 2003, and December 31, 2005, (162 primary care physicians in 1 physician organization linked by a common electronic medical record system in Eastern Massachusetts) to determine changes in physician quality ranking based on an aggregate of Health Plan Employer and Data Information Set (HEDIS) measures after adjusting for practice site, visit frequency, and patient panel characteristics.

MAIN OUTCOME MEASURES

Composite physician clinical performance score based on 9 HEDIS quality measures (reported by percentile, with lower scores indicating higher quality).

RESULTS

Patients of primary care physicians in the top quality performance tertile compared with patients of primary care physicians in the bottom quality tertile were older (51.1 years [95% confidence interval {CI}, 49.6-52.6 years] vs 46.6 years [95% CI, 43.8-49.5 years], respectively; P < .001), had a higher number of comorbidities (0.91 [95% CI, 0.83-0.98] vs 0.80 [95% CI, 0.66-0.95]; P = .008), and made more frequent primary care practice visits (71.0% [95% CI, 68.5%-73.5%] vs 61.8% [95% CI, 57.3%-66.3%] with >3 visits/year; P = .003). Top tertile primary care physicians compared with the bottom tertile physicians had fewer minority patients (13.7% [95% CI, 10.6%-16.7%] vs 25.6% [95% CI, 20.2%-31.1%], respectively; P < .001), non-English-speaking patients (3.2% [95% CI, 0.7%-5.6%] vs 10.2% [95% CI, 5.5%-14.9%]; P <.001), and patients with Medicaid coverage or without insurance (9.6% [95% CI, 7.5%-11.7%] vs 17.2% [95% CI, 13.5%-21.0%]; P <.001). After accounting for practice site and visit frequency differences, adjusting for patient panel factors resulted in a relative mean change in physician rankings of 7.6 percentiles (95% CI, 6.6-8.7 percentiles) per primary care physician, with more than one-third (36%) of primary care physicians (59/162) reclassified into different quality tertiles.

CONCLUSION

Among primary care physicians practicing within the same large academic primary care system, patient panels with greater proportions of underinsured, minority, and non-English-speaking patients were associated with lower quality rankings for primary care physicians.

Addition of generic medication vouchers to a pharmacist academic detailing program: effects on the generic dispensing ratio in a physician-hospital organization

BACKGROUND

Generic dispensing ratio (GDR) is an important measure of efficiency in pharmacy benefit management. A few studies have examined the effects of academic detailing or generic drug samples on GDR. On July 1, 2007, a physician-hospital organization (PHO) with a pay-for-performance incentive for generic utilization initiated a pilot generic medication voucher program that augmented its existing pharmacist-led academic detailing efforts. No published studies have examined the role of generic medication vouchers in promoting generic drug utilization.

OBJECTIVE

To determine if supplementing an existing academic detailing initiative in a PHO with a generic medication voucher program would be more effective in increasing the GDR compared with academic detailing alone.

METHODS

The intervention took place over the 9-month period from July 1, 2007, through March 31, 2008. Vouchers provided patients with the first fill of a 30-day supply of a generic drug at no cost to the patient for 8 specific generic medications obtained through a national community pharmacy chain. The study was conducted in a PHO composed of 7 hospitals and approximately 2,900 physicians (900 primary care providers [PCPs] and 2,000 specialists). Of the approximately 300 PCP practices, 21 practices with at least 2 physicians each were selected on the basis of high prescription volume (more than 500 pharmacy claims for the practice over a 12-month pre-baseline period) and low GDR (practice GDR less than 55% in the 12-month pre-baseline period). These 21 practices were then randomized to a control group of academic detailing alone or the intervention group that received academic detailing plus generic medication vouchers. One of 10 intervention groups declined to participate, and 2 of 11 control groups dropped out of the PHO. GDR was calculated monthly for all pharmacy claims including the 8 voucher medications. GDR was defined as the ratio of the total number of paid generic pharmacy claims divided by the total number of paid pharmacy claims for 108 prescriber identification numbers (Drug Enforcement Administration [DEA] or National Provider Identifier [NPI]) for 9 intervention groups [n = 53 PCPs] and 9 control groups [n = 55 PCPs]). For both intervention and control arms, the GDR for each month from July 2007 (start of 2007 Q3, intervention start date) through September 2008 (end of 2008 Q3, 6 months after intervention end date) was compared with the same month in the previous year. A descriptive analysis compared a 9-month baseline period from 2006 Q3 through 2007 Q1 with a 9-month voucher period from 2007 Q3 to 2008 Q1. A panel data regression analysis assessed GDR for 18 practices over 27 months (12 months pre-intervention and 15 months post-intervention).

RESULTS

A total of 656 vouchers were redeemed over the 9-month voucher period from July 1, 2007, through March 31, 2008, for an average of about 12 vouchers per participating physician; approximately one-third of the redeemed vouchers were for generic simvastatin. The GDR increase for all drugs, including the 8 voucher drugs, was 7.4 points for the 9 PCP group practices with access to generic medication vouchers, from 53.4% in the 9-month baseline period to 60.8% in the 9-month voucher period, compared with a 6.2 point increase for the control group from 55.9% during baseline to 62.1% during the voucher period. The panel data regression model estimated that the medication voucher program was associated with a 1.77-point increase in overall GDR compared with academic detailing alone (P = 0.047).

CONCLUSION

Compared with academic detailing alone, a generic medication voucher program providing a 30-day supply of 8 specific medications in addition to academic detailing in PCP groups with low GDR and high prescribing volume in an outpatient setting was associated with a small but statistically significant increase in adjusted overall GDR.

A critical appraisal of physician-hospital integration models

The economic environment and the current health care debate have prompted a critical reevaluation of previous and current physician-hospital integration models. Even though the independent, self-employed, private practice, medical staff remains the most common model, surgical specialists such as vascular surgeons are increasingly being employed and integrated into health care delivery systems. The degree of integration varies from minimal to full integration or full employment. This review defines the forces driving these changes and analyzes the strengths and weaknesses of each employment model from the physicians' point of view. Strategies for the successful implementation of a 21st century integrative employment model are discussed.

Physician business deals: surveying the new landscape

Strong hospitals and health systems should be on the lookout for opportunities today to acquire physician businesses at depressed fair market values. In some instances, an outright purchase of physicians' interest in a physician-hospital joint venture may be preferable; in others, the hospital may benefit more from simply increasing its interest in the venture. A critical part of the strategy should be taking steps to ensure the physicians remain engaged, including addressing physicians' income goals and need for control.

Clinical integration, round two: finding success with economic coordination

To establish an effective, and lasting, collaboration with physicians, a hospital must: Create a positive vision of the future. Structure the collaboration to reflect market imperatives. Work only with the best partners and make it clear from the start what the expectations are for those partners. Establish accounting and governance practices that promote the venture's near-term profitability and the long-term goals.

Physician integration is back--and more important than ever

Current affiliation strategies tend to focus on joint ventures and employment. Careful planning and organizing of a joint venture can mitigate their associated legal, tax, regulatory, and cultural risks. The success of an employment model depends upon a compensation structure that aligns the incentives of physicians and the hospital. Fora successful affiliation program, hospitals should determine needs and trends, implement strategic planning, and conduct due diligence.

Hospital/physician alliance creating new care model

Giving physicians an ownership stake gives them an additional incentive to improve processes. Pilot nursing unit includes decentralized nursing stations so nurses are closer to their patients. Staffing has been altered so that nurse-to-patient ratios are the same on all shifts.

Convenient medical clinics reshaping the healthcare landscape

Many physicians are developing their own convenient medical clinic locations, but hospitals are lagging in seizing this business opportunity. Obstacles to CMC development include finding a viable partner, staffing the clinics, and overcoming legal issues. Hospitals need to decide whether they want to compete, partner, or do nothing.

Hospital-physician joint ventures: maximizing the potential

Four primary hospital-physician models are per-click service agreements, management services agreements, gainsharing, and equity joint ventures. Four key attributes needed for successful joint ventures are clinical quality, customer satisfaction, operational effectiveness, and financial soundness. Hospitals and physicians need to approach joint ventures with expectations of high performance.

Physician hospital consumer collaboration

The authors describe a disease management initiative designed to address issues of noncompliance in a diabetic population. The program design was a collaborative effort between a payer and a public health organization representing Hartford Hospital and Hartford Physicians Association. Interventions included a patient self-assessment, phone counseling, and a monetary reward for program participation.