Costs of Physician-Hospital Integration

Given that the enactment of the Patient Protection and Affordable Care Act of 2010 is expected to generate forces toward physician-hospital integration, this study examined an understudied, albeit important, area of costs incurred in physician-hospital integration. Such costs were analyzed through 24 semi-structured interviews with physicians and hospital administrators in a multiple-case, inductive study. Two extreme types of physician-hospital arrangements were examined: an employed model (ie, integrated salary model, a group of physicians integrated by a hospital system) and a private practice (ie, a physician or group of physicians who are independent of economic or policy control). Interviews noted that integration leads to 3 evident costs, namely, monitoring, coordination, and cooperation costs. Improving our understanding of the kinds of costs that are incurred after physician-hospital integration will help hospitals and physicians to avoid common failures after integration.