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340B Spotlight: ICYMI – New study on hospital-physician practice consolidation

Rachel Licata   |     November 3, 2015   |   SHARE THIS

340BSpotlight_HeaderIn case you missed it, a recent study in JAMA Internal Medicine, “Association of Financial Integration Between Physicians and Hospitals with Commercial Health Care Prices,” looked at the spending and pricing changes for outpatient and inpatient services and their association with the increase in hospitals acquiring physician practices. Their key findings include:

  • From 2008 to 2012, there was an average 3 percent increase in physician-hospital integration across 240 metropolitan statistical areas (MSAs).
  • The increase in hospitals acquiring physician practices was accompanied by an increase in prices for outpatient spending. In MSAs where integration was highest, researchers found that outpatient spending increases by an average of $75 per commercially insured patient per year.
  • Increases in outpatient spending were “driven almost entirely by price increases” because utilization changes were “minimal.” No significant changes were found with inpatient spending or utilization. 

So how does this relate to 340B? Recent research found 340B hospitals are more likely than other hospitals to purchase independent physician offices that administer medicines. The JAMA study adds to previous research that found hospitals acquiring physician can drive up costs for patients and payers, in addition to reducing community treatment options.

340BSpotlight_ThumbnailThe 340B program should be helping patient’s lower costs, not increasing them. Reform is needed to ensure the program helps those it was intended to help, rather than driving up health care costs and serving as a revenue generator for hospitals.

Rachel Licata

Rachel Licata Rachel is a senior director of policy and research at PhRMA focusing on the Affordable Care Act and other public programs. Prior to joining PhRMA she worked at the Kaiser Family Foundation and the Department of Health and Human Services. Rachel enjoys taking yoga classes and exploring the local cuisine of the Maryland suburbs.

Topics: 340B, 340B Spotlight

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