Trend of hospitals hiring doctors could drive up health care costs

According to a new study by the Center for Studying Health System Change, the pattern isn't new but is picking up speed in the quest to increase market share and revenue.

CQ HealthBeat: Yet Another Source Of Rising Health Costs: Hospitals Hiring Physicians
Hospitals are increasingly signing up physicians as employees, but the trend may raise health care costs in the short term, says a study released Thursday by the Center for Studying Health System Change. The problem is that both hospitals and doctors will continue to practice in a fee-for-service environment that stresses volume, the study says. Hospitals that tie physician compensation to productivity encourage doctors to step up the volume, it says. Physicians hired by hospitals also told researchers that the hospitals put pressure on them to order additional and more expensive tests. "In one market, at least two cardiologists declined hospital employment offers because they perceived the pressures to drive up volume were stronger than those in their mid-sized, independent cardiology group," said the study (Norman, 8/18).

Kaiser Health News' Capsules: Hospitals Gobble Up More Doctors
The race among hospitals to hire local physicians is heating up, even though the consequences for the cost and quality of health care are still unclear. The trend isn't new, but hospitals in metropolitan areas across the country are quickening their pace, "driven largely by hospitals' quest to increase market share and revenue," according a study released today by the Center for Studying Health System Change, a nonprofit think tank in Washington D.C. (Gold, 8/18).

Modern Healthcare: Hospitals Employing More Docs To Grow Market Share, Study Finds
Hospitals are increasingly employing physicians in their efforts to grow market share and revenue yet the practice does not guarantee clinical integration and may lead to higher costs at hospitals, according to a new study from the Center for Studying Health System Change. The center found that hospitals can improve quality by aligning with physicians but employing physicians is not a guarantee of clinical integration. The authors noted that the trend is not new but hospitals are now using productivity-based compensation and limiting purchases of a practice's capital assets, as compared to the salaried deals with physicians in the 1990s (Lee, 8/18).