Physician Practices with Robust Capabilities Spend Less on Medicare Beneficiaries

By | May 26, 2022

As consolidation and integration of physician practices occur, especially within organizations that can wrap capabilities around ambulatory clinical care, we must examine the potential benefit to those we serve. This ideal is also the premise for a clinically integrated network where payment models are designed to allow for enhanced capabilities available to smaller groups of clinicians. These enhanced services include evidenced-based guidelines, electronic medical record decision support, complex care management with care managers (team-based models of care) and innovative models and tools to deliver patient-centered care.

Recent data by Rodriguez et al. published in Health Affairs has shown that those practices with robust capabilities have a lower total cost of care for Medicare beneficiaries than those with less robust capabilities. Though the savings were modest, when extrapolated to all the practices, the savings grew to $14.9 billion annually.

These findings raise two questions:  Does consolidation enhance care and lower costs, and do value-based care models improve cost and quality outcomes? Interestingly, what this data shows is the need for both. Size alone does not matter, and without size, robust capabilities are not deliverable. Therefore, instead of arguing about restricting trade or whether bigger is or isn’t better, let us focus on utilizing size and consolidation for the betterment of those we serve. Infrastructure costs are lower per unit when spread across a more extensive base of members. Innovation requires a particular size; otherwise, they are merely good ideas without the ability to implement.

There are obvious downsides to large practices, such as the feeling that one is simply a number in a large organization. However, we can overcome these personal dynamics within an experiential service model. There are multitudes of multi-million-dollar companies that have the knack of making you feel you are their primary focus.

Let us continue to focus on all the issues at hand, including how to provide robust capabilities within our physician practices that are both patient-centric and scalable.