Utilization, Steering, and Spending in Vertical Relationships Between Physicians and Health Systems

Abstract

ImportanceVertical relationships (eg, ownership or affiliations, including joint contracting) between physicians and health systems are increasing in the US.ObjectiveTo analyze how vertical relationships between primary care physicians (PCPs) and large health systems are associated with changes in ambulatory and acute care utilization, referral patterns, readmissions, and total medical spending for commercially insured individuals.Design, Setting, and ParticipantsThis case-control study with a repeated cross-section, stacked event design analyzed outcomes of patients whose attributed PCP entered a vertical relationship with a large health care system in 2015 or 2017 compared with patients whose attributed PCP was either never or always in a vertical relationship with a large health system from 2013 to 2017 in the state of Massachusetts. The sample consisted of commercially insured patients who met enrollment criteria and who were attributed to PCPs who were included in the Massachusetts Provider Database in 2013, 2015, and 2017 and for whom vertical relationships were measured. Enrollee and claims data were obtained from the 2013 to 2017 Massachusetts All-Payer Claims Database. Statistical analyses were conducted between January 5, 2021, and June 5, 2023.ExposureEvaluation-and-management visit with attributed PCP in 2015 to 2017.Main Outcomes and MeasuresOutcomes (which were measured per patient-year [ie, per patient per year from January to December] in this sample) were utilization (count of specialist physician visits, emergency department [ED] visits, and hospitalizations overall and within attributed PCP’s health system), spending (total medical expenditures and use of high-price hospitals), and readmissions (readmission rate and use of hospitals with a low readmission rate).ResultsThe sample of 4 030 224 observations included 2 147 303 females (53.3%) and 1 881 921 males (46.7%) with a mean (SD) age of 35.07 (19.95) years. Vertical relationships between PCPs and large health systems were associated with an increase of 0.69 (95% CI, 0.34-1.04; P < .001) in specialist visits per patient-year, a 22.64% increase vs the comparison group mean of 3.06 visits, and a $356.67 (95% CI, $77.16-$636.18; P = .01) increase in total medical expenditures per patient-year, a 6.26% increase vs the comparison group mean of $5700.07. Within the health care system of the attributed PCPs, the number of specialist visits changed by 0.80 (95% CI, 0.56-1.05) per patient year (P < .001), a 29.38% increase vs the comparison group mean of 2.73 specialist visits per patient-year. The number of ED visits changed by 0.02 (95% CI, 0.01-0.03) per patient year (P = .001), a 14.19% increase over the comparison group mean of 0.15 ED visits per patient-year. The number of hospitalizations changed by 0.01 (95% CI, 0.00-0.01) per patient-year (P < .001), a 22.36% increase over the comparison group mean of 0.03 hospitalizations per patient-year. There were no differences in readmission outcomes.ConclusionsResults of this case-control study suggest that vertical relationships between PCPs and large health systems were associated with steering of patients into health systems and increased spending on patient care, but no difference in readmissions was found.

Health Plan Switching and Health Care Utilization

“…Here, too, while we see an encouraging pattern of utilization with an increase in low-cost practitioner visits and decreases in high-cost emergency department visits and hospitalizations, our observed effects are small. For that reason, future researchers seeking to study the downstream utilization of marketplace enrollees will need large sample sizes, stronger interventions, and preferably both …”

“…For that reason, future researchers seeking to study the downstream utilization of marketplace enrollees will need large sample sizes, stronger interventions, and preferably both. 14 …”

Quality-of-Care Outcomes in Vertical Relationships Between Physicians and Health Systems

“…The findings of decreased practice site fragmentation and increased within-system oncology follow-up can be described as patient steering , which has been shown to increase spending, largely through higher prices. 24 Less fragmentation of practice site visits and more timely follow-up may improve patient experiences. However, steering privately insured individuals to large health systems could have market-level effects, such as reduced revenue from the commercially insured among nonsystem, smaller physicians, and hospitals.…”

“…We included patient-years in which the individual had at least 7 months of total enrollment in any commercial plan in the APCD and at least 1 evaluation and management claim with a physician in the MPD. Following methods published previously, 24 we attributed each patient-year to the PCP in the MPD associated with the plurality of the patient’s evaluation and management claims in that year (eAppendix in Supplement 1 ). Attribution was completed for each patient-year separately.…”

Gluing together a fragmented healthcare system for geriatrics will be hard. It's time for united action

“…More specifically, how our FFS financial incentives support disease specific and procedural based specialty care; disincentivizes multidisciplinary team based care; and creates conditions that incentivize healthcare systems to invest in profitable clinical services lines that justify and support hospital/healthcare system consolidation and growth mindset. [25][26][27][28][29][30][31] One may question the oversimplification that finances play an outsize role in limiting GCSLs dissemination, but we counter with this-if positive financial margins are not key decision and policy drivers, why has private equity invested in multispecialty physician practices, hospitals/healthcare systems, and long-term care settings in recent years? [32][33][34][35] It's not to lose money!…”