Something Old, Something New: Recent Developments in Hospital-Physician Relationships

Feb. 21, 2003
Health Services Research, 38:1, Part II (February 2003), pp. 471-488
Timothy K. Lake, Kelly Devers, Linda R. Brewster, Lawrence P. Casalino

As HMO enrollment and capitation contracting has failed to grow in local markets, hospital executives have returned to a strategic focus on improving relationships with specialists in pursuit of fee-for-service revenue. Yet, sixty-five percent of hospitals interviewed in 2000 continued to own primary care physician practices, with ownership more prevalent in highly concentrated hospital markets. A majority (55 percent) of hospitals have decreased the size of these practices in the past tow years.

The potential for quality improvement through integrated delivery systems - by emphasizing primary care and coordinating hospital and physician services - has not been realized. Interest in forming these organizations has waned. The new emphasis on hospital-specialist partnerships may improve the financial status of hospitals and participating specialists in local markets, and may improve quality of care in selected service areas, but it may also increase health care costs incurred by employers and consumers.

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