Physician-hospital consolidation causes Medicare spending on labs, imaging to soar: study

by Robert King | May 7, 2021

Medicare spending on imaging and lab services increased by $73 million after a hospital or health system acquired a physician practice, according to a new study that raises questions about the benefits of vertical healthcare integration.

The study, released Wednesday in the journal Health Affairs, is the latest to explore how the trend of hospitals buying up practices is affecting healthcare prices and spending. A major reason for the increase in spending is physician offices moving more services to the hospital, which charge Medicare more than nonhospital providers.

The study looked at Medicare fee-for-service claims data from 2013 to 2016. It examined if hospital or health system ownership of physician practices were “associated with changes in the site of care or Medicare reimbursement rates for ten common diagnostic imaging and laboratory services,” the study said.

It explored the number of procedures per 1,000 Medicare beneficiaries attributed to a physician group performed in the hospital and nonhospital sites of care. Overall, the study looked at 29.5 million imaging procedures from 13.3 million Medicare beneficiaries and 341.4 million lab tests from nearly 17 million beneficiaries.

Researchers found that the number of procedures that translated from a non-hospital provider like a free-standing laboratory to a hospital increased when a provider joined a hospital.


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Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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