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The Influence of the Structure of Medical Group Practices on Costs and Quality of Care
Medical group practices are central to many of the proposals for health care reform but little is known about variations in their cost effectiveness or the characteristics of best practices. This study addresses these issues by analyzing cost and quality of care provided by a national sample of 212 medical group practices.
Methods
Practices are matched with the Medicare enrollees who received a plurality of their primary care from them during 2008. Risk-adjusted per member per year (PMPY) costs and 11 quality of care measures are calculated for each practice, and the influence of practice organizational characteristics then is analyzed using multivariate regression.
Results
There is a 39% difference in the PMPY risk-adjusted costs between practices in the lowest and highest cost quartiles. Quality of care also varies but is not related to costs. Hospital-owned practices have higher costs and lower overall quality. Regional differences diminished significantly when practice level variables are controlled and costs are risk adjusted.
Conclusions
Providing incentives for Medicare enrollees to select low cost medical practices would result in substantial savings without lowering quality. Our data provide encouragement but also some cautions for ACOs. While local cost effective care systems clearly can be identified, some of the attributes thought to be important to these systems appear to increase costs with no improvement in quality.