‘Robust’ physician practices spend less on Medicare beneficiaries: study

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Health systems ‘may contribute to managing spending.’

Physician practices with robust capabilities spent less on Medicare fee-for-service beneficiaries than those with mixed or limited capabilities, but quality and utilization did not differ significantly, according to a new study.

The study “Physician Practices with Robust Capabilities Spend Less on Medicare Beneficiaries Than More Limited Practices” was published in the journal Health Affairs. It was based on more than 1.51 million Medicare fee-for-service beneficiaries attributed to 1,772 physician practice locations that responded to the 2017 National Survey of Healthcare Organizations and Systems, linked with 2017 Medicare fee-for-service claims data.

The researchers acknowledged there was no “gold standard” for measuring practice capabilities. Practices were evaluated based on technology and innovation capacity; management and culture; and patient-centered care focus.


Results showed “that physician practice locations with robust capabilities, including robust technology and innovation capacity, strong management and team cultures, and patient-centered orientations, had lower spending for Medicare fee-for-service beneficiaries compared to practice locations with more limited capabilities,” the study said.

Medicare fee-for-service spending was lower for physician practices owned by hospitals, health systems or medical groups.

“The additive effect of system-group ownership and practice-level capabilities on total spending underscores that system-level support may contribute to managing spending,” the report said.

The researchers said the cost savings attributable to practices with robust capabilities, as compared to those with mixed or limited capabilities, “were modest in magnitude.”

However, if all physician practices performed at the level of robust practices, it would generate an estimated $14.9 billion in annual savings among fee-for-service beneficiaries.