The vertical integration of physician groups and health systems is pushing colonoscopies to be performed in hospital outpatient departments over ASCs, ultimately driving Medicare and patient out-of-pocket costs up, according to a study published July 25 in Science Direct.
To determine how vertical integration changes services, the study analyzed data collected between 2013 and 2019 from 1 million arthroscopy and 10 million colonoscopy procedures in the U.S. Medicare population.
The study used primary care physicians to measure patient’s exposure to vertical integration, rather than specialist physicians, "due to the concern that health systems may influence patient referrals to these same specialists."
Here are six key notes:
1. Scaling the change in Medicare payments by the increased use of ASCs equates to estimated 35% higher Medicare payments at HOPDs than ASCs for colonoscopy.
2. The report found that following vertical integration, there is a 6.8 percentage point increase in the use of HOPDs instead of ASCs for colonoscopies.
3. The report also estimated that vertical integration leads to an 8.1 percentage point higher probability of choosing an HOPD over an ASC for colonoscopies.
4. For colonoscopies and arthroscopies, the report estimated that changing from "status quo to fully integrated relationships for all physicians" will lead to a $315.4 million increase in Medicare spending and a $63.1 million increase in patients' out-of-pocket costs.
5. Medicare reimburses ASCs at roughly one-half to two-thirds the reimbursement rate for HOPDs, meaning that "vertical integration can create incentives to perform procedures" at HOPDs.
6. If all the primary groups were vertically integrated, 542,066 more colonoscopy procedures would be performed at HOPDs — a 20% increase — increasing patient payments by $56.9 million.