Hospitals Purchasing Doctor Practices to Improve Efficiency in Care


Are private doctor offices going to be a thing of the past? A new trend among hospitals is to purchase thriving practices in order to both improve efficiency of care and to position themselves better financially due to health care reform.

The Syracuse Post-Standard today reports that St. Joseph’s Medical Center in New York is buying North Medical PC, the largest private primary practice in the central part of the state which has a staff of more than 450 and serves more than 320,000 patients annual from its two locations. St. Joseph president Ted Pasinski says “A more integrated approach between physicians and hospitals is where the future of healthcare is.”

Crouse Hospital, also in New York, recently made a similar move, purchasing Internist Associates of central New York, a primary care practice with about 40,000 patients.

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According to Tom Dennison, a Syracuse University professor and health care expert, “Heath care reform is expected to put financial pressure on hospitals, primary care doctors and other providers.” He states that the health care payment system is at fault, due to a fee-for-service payment system that encourages doctors to provide unnecessary or less cost-effective care.

Under the hospital system, administrators encourage more efficiency because they are paid a fixed amount to treat a patient with a certain diagnosis, regardless of how long the patient is hospitalized.

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The move may also be good for patients, as the doctor they see in the office is more likely to be the doctor involved with their care as an in-patient. Stressed-out doctors may also benefit, due to a more secure salary and less of the administrative hassles that go along with owning a practice.

Because the new health care reform law is expected to result in a significant increase in people with health insurance and seeking primary care, integrating doctors and hospitals is also part of a strategy to ensure that there are enough practitioners to deal with patient needs effectively and efficiently.