According to a recent federal research study, Medicare beneficiaries are feeling the cost burden that is resulting from the consolidation of hospital systems and independent physician practices. These enrollees are paying more for their healthcare, as the hospital-physician systems are raising prices for insurers.
Health systems are actively pursuing purchasing physician practices to integrate into their hospitals to take advantage of the more desirable reimbursement rates for their hospitals. Due to this benefit, more hospitals have integrated independent physicians into their systems, with an increase from 26% in 2012 to 44% in 2018. A lot of these health systems are moving many of their services to their outpatient departments.
According to hospital systems, the vertical integration of physicians into health systems can improve quality of service and can decrease spending. By also improving care coordination and cutting out unnecessary medical services, costs can be cut down. But according to the CEO and President of Gesinger, the vertical integration combined with hospital outpatient billing is leading to higher prices.
A finding in the recent federal research study showed that these vertical integrations do not significantly improve the quality of healthcare, due to the fact that the mergers do not make much differences in clinical integration and have no significant impact on cost-sharing.
One of the major concerns that stemmed from the federal study is that the higher rates for insurers may make Medicare rates look poorer in comparison. This bad comparison could lead to health systems demanding an increase in Medicare reimbursements.
Read the original article from Modern Healthcare here.