Question

as future hospital administrators, are the winners: hospitals, physicians, insurers and payers or patients? Are some form of regulation required to keep the market competitive? Do these trends go against the historical roots of US medicine? And if they do, how might they affect the current hospital governance structure? Are members of the medical staff truly independent if they are employees?

Reading that goes along with the question above.........

Hospital acquisition trends continue to persist, according to a report from Avalere Health and the Physicians Advocacy Institute (PAI), which found that 5000 independent physician practices were acquired by hospitals between July 2015 and July 2016.

During the time period, the number of physicians employed by hospitals grew by 14,000, also representing an 11% increase in employed physicians. According to the report, every region of the country saw an increase in both hospital ownership of practices and physician employment. The rate of hospital-owned practices increased between 8% and 47% in every region in the country, and the rate of hospital-employed physicians increased between 5% and 22%.

“As payers and hospitals drive consolidations across the healthcare system, it is becoming more and more difficult for a physician to maintain an independent practice,” said Robert Seligson, president, PAI, and chief executive officer of North Carolina Medical Society, in a statement.

These trends represent the fourth consecutive year of growth in hospital acquisition of practices and physician employment. Over the past 4 years, the percentage of hospital-employed physicians increased by more than 63%, with increases in nearly every 6-month time period. Regions nationwide saw an increase in hospital-owned practices at every measured time period, ranging from 83% to 205%.

Regionally, more than half of physicians in the Midwest were employed by hospitals, and more than one-third of Midwest physician practices were hospital owned in 2016. Rates of employment were lowest in the south, where 37% of physicians were employed by hospitals, and in Alaska and Hawaii, where 33% were employed.

“When physicians are employed by hospitals or health systems, they perform more services in a hospital outpatient department setting (HOPD) than independent physicians,” states the report. “The higher proportion of services performed in a HOPD setting increases both costs to the Medicare program and financial responsibility for patients.”

According to the report, for cardiac imaging, colonoscopy, and evaluation and management services, Medicare pays more across an episode of care when patients receive services in a HOPD setting. For cardiac imaging, it costs $5148 for an episode of care in an outpatient department, compared to $2862 in a physician office; for colonoscopy, it costs $1784 for an episode of care in an outpatient department, compared to $1322 in a physician office; and for evaluation and management services, it costs $525 for an episode of care in the outpatient department, compared to $406 in a physician office.

A recent study published in JAMA Oncology found similar cost differences in the administering of chemotherapy. The researchers found that the administering of infused chemotherapy is increasingly shifting from physician offices to HOPDs and is also associated with increased spending on chemotherapy services for commercial insurers.

The Avalere Health and the PAI report builds upon a prior analysis from the partnership that examined national and regional changes in physician employment trends from July 2012 through July 2015. The study found that the number of physician practices acquired by hospitals and health systems increased by 86% during the time period, with the percentage of physicians employed by hospitals or health systems increasing in every region of the country. By mid-2015, nearly 40% of physicians were employed by hospitals and health systems, reflecting an approximately 50% increase during the 3-year period.

2nd reading

February 21, 2019 - Hospital acquisitions of physician practices continues to be a strong trend in the healthcare space, according to new data from Avalere Health and the Physicians Advocacy Institute (PAI).

In an emailed press release, the organizations reported that hospitals acquired approximately 8,000 physician practices between July 2016 and July 2018. That number is on top of the 5,000 hospital acquisitions of physician practices from July 2015 to July 2016.

Overall, hospital acquisitions of physician practices increased by 128 percent from 2012 to 2018, the updated analysis found. In July 2012, only 35,700 practices were considered hospital-owned, but that number jumped to 80,000 practices by the start of 2018.

While hospitals engaged in robust acquisition activity, physician employment by hospitals and health systems also dramatically increased since 2012, the analysis revealed.

Over the five-and-half-year study period, the number of physicians employed by hospitals or health systems increased by more than 70 percent, growing from 94,700 employed physicians in mid-2012 to 168,800 employed physicians by the start of 2018.

During the most recent 18-month period alone, 14,000 physicians left their private practices to work for a hospital or health system.

Additionally, researchers found that all regions experienced an uptick in hospital-owned practices at every measured time period. The increase of hospital-owned practices in the regions ranged from 91 percent to 303 percent.

“The continued trend of hospital-driven consolidation is dramatically reshaping the healthcare system,” Robert Seligson, PAI’s President and CEO of the North Carolina Medical Society, stated in the press release. “PAI will continue to advocate for fair, transparent policies and champion physician clinical autonomy, regardless of the practice setting, to ensure that physicians can continue to deliver the best possible care to their patients.”

In general, healthcare mergers and acquisitions are taking off. PricewaterhouseCoopers (PwC) recently reported that merger and acquisition activity across the entire industry increased 14.4 percent in 2018, and deals among provider organizations, including hospitals and physician groups, accounted for 28 percent of the total number of transactions.

Reducing costs, improving care quality, increasing efficiency, and implementing value-based care are among the top reasons why providers are looking to mergers and acquisitions. Acquiring or merging with another provider organization allows both providers to leverage economies of scale, brand recognition, and other valuable capabilities.

In particular, physician practices are drawn to hospital acquisitions. AMGA recently found that the operating loss per physician increased from 10 percent of net revenue in 2016 to 17.5 percent by 2017. As a result, total losses during the two-year period grew from a median of $95,138 to $140,856 per doctor.

Merging with a hospital enables physicians to shoulder the financial burden of running a practice in a time when reimbursement rates are falling and providers are under increased pressure to decrease their costs.

At the same time, an acquisition allows the practice to take advantage of the hospital’s technological, administrative, and financial infrastructure that would otherwise be out-of-reach for most practices.

But hospital acquisitions of physician practices could spell trouble not only for independent physicians, but also the industry at large.

A separate Avalere Health and PAI study from 2017 found that the growing number of hospital-employed physicians is behind the $3.1 billion increase in total Medicare spending on four common services.

Another study from 2017 also showed that cancer costs were 60 percent higher when patients underwent chemotherapy at a hospital-based versus independent center.

“Hospital consolidation pushes healthcare costs upward,” explained Seligson in 2017. “The impact of hospitals owning outpatient practices places a greater financial burden on Medicare beneficiaries and on taxpayers.”

It is a difficult time to be an independent physician. Major stakeholders have argued that value-based care and healthcare reform in general are the death knell of the independent physician practice.

However, remaining independent is still a viable option for physicians. Groups like PAI are advocating for policies and regulations that level the playing field for independent practices and physicians. The group recently called for increased market competition, more site-neutral payment policies, and small practice support for value-based reimbursement programs like MACRA.

Independent practice associations (IPAs) are also looking to help physicians stay autonomous while still leveraging the capabilities of their peers. IPA allow practices to compete with their larger peers and share resources to stay afloat financially.

“Sometimes independent physicians are so independent that it's a detriment to their own survival,” Paul Reiss, MD, HealthFirst’s Chief Medical Officer, recently told RevCycleIntelligence.com. “Whereas joining with other like-minded individuals in similar practice situations creates this energy that allows them to survive.”

Question!!

So, as future hospital administrators, are the winners: hospitals, physicians, insurers and payers or patients? Are some form of regulation required to keep the market competitive? Do these trends go against the historical roots of US medicine? And if they do, how might they affect the current hospital governance structure? Are members of the medical staff truly independent if they are employees?

Answer 1

Answer: we will discuss on many facts and come to an conclusion:

Technical factors

Healthcare is just a market for technology where consumers such as hospitals are happy to pay enormous amounts of money, particularly for prestige equipment, such as PET and MRI scanners and linear accelerators.

The top predictions for global healthcare for 2019 are as follows:

Prediction #1: 15% of global healthcare spending will be tied to Value-based Models

During 2019, the healthcare industry will continue to transit to the value-based model. We anticipate that by end of 2019, up to 15% of global healthcare spending will be tied in some form with Value/outcome based care concepts. The impetus for this shift will be more exigent for countries that currently spend nearly 10% or more of their GDP on healthcare spend [e.g., the United States, Netherlands, Sweden, France, Germany, Canada, and Japan among others]. During 2019, VBC initiative will continue to transition from economic model/cost-effectiveness measures to more health outcomes and treatment focus – by means of data-driven risk sharing frameworks and sustainable reimbursement model that benefits both providers and payers.

Prediction #2: Artificial Intelligence (AI) for healthcare IT Application will cross $1.7 billion by 2019

During 2019, AI across clinical and non-clinical use cases will show hard results further bolstering the growth of in healthcare space. We expect AI for Healthcare IT application market to cross $1.7 billion by end of 2019. We further anticipate that by operationalizing AI platforms across select healthcare workflows would result in 10–15% productivity gain over the next 2-3 year. However, the pricing for AI solutions remains critical as end-users are often not convinced to dedicate an additional budget for such IT capabilities. A cost effective approach with clear evidence for potential ROI for both parties can help sustain the market growth. Throughout 2019, AI and machine learning will further evolve human and machine interaction. More specifically, AI will begin to see fruition, particularly in the imaging diagnostic, drug discovery, and risk analytics applications.

CONCLUSION:

according to the growing needs of hospital care, increasing costs of care and arising of new disease and disorders the approach to the health care is increasing day by day.

The hospital administration is responsible for all the payments for the health care professional.

The hospital administration and the physicians who are independent are the winners of the future hospital administration. Though the hospital may not gain a major profit in some months the salary of the physician should be given to them respectively.