Vertical integration in medicine is driving up pricing for patient care in workers’ compensation, and provider consolidation doesn’t necessarily lead to improvements in patient outcomes, according to research from the Workers Compensation Research Institute.
The study released Thursday, Impact of Medical Provider Consolidation on Workers’ Compensation Payments, examined the impact of provider vertical integration on compensation payments, showing how physician costs changed after medical practices were acquired by hospitals and health systems.
The study shows that there was an 8% increase in the average payment per medical procedure in compensation claims involving vertical integration, and it found that the effects of consolidation on medical payments were greater in states without medical fee schedules designed to control costs.
The study found that between 2012 and 2018, there was an increase in the number of both primary care physicians and orthopedic surgeons practicing in locations owned by hospitals and health care systems, with the former jumping from 32% to 49% and the latter increasing from 18% to 35 %.
The researchers said that while there are many trends in physician consolidation that are external to the workers’ comp system, “they still affect many aspects of the medical care provided to workers with injuries.”
“While this work provides suggestive evidence about changes in the use of care, more research is needed to examine specific mechanisms behind the changes in the mix of care and access to care as providers become vertically integrated,” the authors wrote.