Physician Management Companies and Neonatology Prices, Utilization, and Clinical Outcomes

Physician management companies (PMCs) acquire physician practices and contract with hospitals to provide physician management services. We evaluated the association between PMC-NICU affiliations and prices, spending, utilization, and clinical outcomes.

We linked commercial claims to PMC-NICU affiliations and conducted difference- in-differences analyses comparing changes in prices paid for physician services per critical or intensive care NICU day, length of the NICU stay, physician spending (total paid amount for physician services during stay), spending on hospital services (total paid amount for hospital services during stay), and clinical outcomes in PMC-affiliated versus non-PMC-affiliated NICUs. The study included 2858 infants admitted to 34 PMC-affiliated NICUs and 92 461 infants admitted to 2348 NICUs without an affiliation.

PMC affiliation was associated with a differential increase in the mean price of the 5 most common types of critical and intensive care days in NICU admissions by $313 per day (95% confidence interval, $207-$419) for PMC-affiliated versus non- PMC-affiliated NICUs. This represents a 70.4% increase in prices, relative to the preaffiliation period PMC and non- PMC-affiliated NICU means. PMC-NICU affiliation was also associated with a differential increase in physician spending by $5161 per NICU stay (95% confidence interval, $3062-$7260), a 56.4% increase. There was no significant association between PMC-NICU affiliation and changes in length of stay, clinical outcomes, or hospital spending.

PMC affiliation was associated with large increases in prices and total spending for NICU services, but not with changes in length of stay or adverse clinical outcomes.