Spending per Medicare Beneficiary Is Higher in Hospital-Owned Small- and Medium-Sized Physician Practices.

OBJECTIVE: To examine the relationship of physician versus hospital ownership of small- and medium-sized practices with spending and utilization of care.

DATA SOURCE/STUDY SETTING/DATA COLLECTION: Survey data for 1,045 primary care-based practices of 1-19 physicians linked to Medicare claims data for 2008 for 282,372 beneficiaries attributed to the 3,010 physicians in these practices.

STUDY DESIGN: We used generalized linear models to estimate the associations between practice characteristics and outcomes (emergency department visits, index admissions, readmissions, and spending).

PRINCIPAL FINDINGS: Beneficiaries linked to hospital-owned practices had 7.3 percent more emergency department visits and 6.4 percent higher total spending compared to beneficiaries linked to physician-owned practices.

CONCLUSIONS: Physician practices are increasingly being purchased by hospitals. This may result in higher total spending on care.