Spending per Medicare Beneficiary Is Higher in Hospital‐Owned Small‐ and Medium‐Sized Physician Practices

Objective

To examine the relationship of physician versus hospital ownership of small‐ and medium‐sized practices with spending and utilization of care.

Data Source/Study Setting/Data Collection

Survey data for 1,045 primary care‐based practices of 1–19 physicians linked to Medicare claims data for 2008 for 282,372 beneficiaries attributed to the 3,010 physicians in these practices.

Study Design

We used generalized linear models to estimate the associations between practice characteristics and outcomes (emergency department visits, index admissions, readmissions, and spending).

Principal Findings

Beneficiaries linked to hospital‐owned practices had 7.3 percent more emergency department visits and 6.4 percent higher total spending compared to beneficiaries linked to physician‐owned practices.

Conclusions

Physician practices are increasingly being purchased by hospitals. This may result in higher total spending on care.