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Study: Quality, costs better at big practices

May 12, 2010

It looks like bigger is better when it comes to physician practices. A new study finds that large, multispecialty practices provides higher-quality care at slightly lower cost than their smaller compatriots.

The study found that quality was 5 percent to 15 percent higher at large, multispecialty practices than at small group practices.  Average costs were 3.6 percent lower, or $272 annually per patient.

The findings were published in the May issue of the journal Health Affairs. The study was conducted by Dartmouth University researchers using claims data from the federal Medicare insurance program for patients in 22 markets.

In the Indianapolis area, some of the largest physician practices are getting bigger. On Jan. 1, Indianapolis Neurosurgery Group merged with the IU Department of Neurology to form Goodman Campbell Brain and Spine, which includes 35 physicians.

The Indiana Clinic is trying to combine physician practices of Methodist Hospital and the Indiana University School of Medicine—and a few outsiders—into a 1,500-doctor practice by 2011. So far, 415 are on board.

The St. Vincent Physician Network added more than 30 doctors from the summer of 2008 to the summer of 2009. Now St. Vincent has agreed to acquire The Care Group—a practice of 130 cardiology and primary care doctors—in a deal that would double the amount of physicians employed by St. Vincent.

Physician accountants say many other practices have been growing by adding physicians one or two at a time.

The main factors forcing such mergers is declining reimbursement rates from the federal Medicare program for some specialist physicians (although primary care docs are getting an increase) as well as the high cost doctors face to add electronic medical systems before Medicare penalties begin in 2015.

The Dartmouth researchers suggested large, multispecialty physician practices are well positioned to act as the “accountable care organizations” called for by the new health care reform law, signed by President Obama in March.

The law authorizes the Medicare program to contract with certain health care providers—most likely a combination of a physician group and a hospital—to come up with quality-improving and cost-saving methods. Then Medicare would give some of the savings as a bonus payment to the doctors and hospitals.

"The findings of this study by [the Dartmouth researchers] suggest that large multispecialty medical groups already provide higher-quality, lower-cost care, and would be well positioned to assume the role of accountable care organizations,” Health Affairs editor Susan Dentzer said in a statement. “By continuing to provide higher quality care at lower cost, they could go a long way toward bending the cost curve and achieving other goals of health system reform."

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