Bauer Business Focus

Texas Patients Get Bigger Bills, But No Better Care When Doctors Are Affiliated With A Hospital, Study Finds

A growing number of physicians are employed by hospitals and they tend to charge patients more, according to the Rice study.

The study’s lead author, Vivian Ho, says burdensome reporting requirements cause many physicians to integrate with hospitals.


To embed this piece of audio in your site, please use this code:

<iframe src="" style="height: 115px; width: 100%;"></iframe>

Patients in Texas pay more for healthcare from doctors who are affiliated with hospitals – but they don't necessarily get better care for it, according to a recent study from Rice University.

"If you see a physician who is affiliated with a practice that is owned by a hospital or they're employed by a hospital, the annual spending is going to be 5.8% higher on average," said the study's lead author Vivian Ho, a health economist at Rice University and Baylor College of Medicine.

Researchers analyzed Blue Cross Blue Shield PPO – preferred provider organization – claims in the Houston, Dallas, San Antonio and Austin metropolitan areas for patients aged 19 to 64.

To measure quality of care, they looked at readmissions within 30 days and diagnostic screenings.

"Both physicians who were independent and those who were owned by a hospital or integrated with a hospital, there was no difference in quality overall," Ho said.

The majority of doctors are independent, she said, but there's a trend among physicians to integrate with hospitals.

"The share of physician practices owned by hospitals rose from 14% in 2012 to 29% in 2016," Ho said.

The reason may be that reporting requirements by both the government and private insurers are overwhelming many independent physicians.

"They start thinking themselves, well, this isn't so easy," Ho said. "Maybe it's easier to just turn this all over to a hospital that will take care of the billing, give me more certainty in terms of my income, because they might put me on salary, and I'll take that as a trade-off because the stress is too much."

Ho said her takeaway is that reporting requirements for independent practices should be eased.

"And the other thing is, it's just that both insurers and hospitals have so much more bargaining power against more independent physicians as they consolidate and merge," Ho said. "And so there needs to be a rethinking of our anti-trust regulations to try and slow down the amount of consolidation that is going on in the industry."

Wasteful spending by healthcare providers is another concern, Ho said.

The study controlled for numerous factors, including regional differences in cost, number of patients and relative disease burden.

Subscribe to Today in Houston

Fill out the form below to subscribe our new daily editorial newsletter from the HPM Newsroom.

* required