Utilization of within-hospital services. A study of the effects of two forms of group practice

This study examined the effect of group affiliation on the use of technical (length of stay, lab tests, etc.) and clinical (rendering and requesting consultations) resources by physicians practicing within a large acute care hospital. Comparisons in use were made between physicians in 1) a prepaid group practice (Colorado Permanente Medical Group [Kaiser]); 2) a fee-for-service group practice; and 3) "unaffiliated" physicians. Patient data were adjusted whenever possible for patient diagnosis and severity. In comparison to other physicians in the hospital, the prepaid group physicians utilized somewhat fewer technical resources, though the results were not statistically significant. Differences in the use of clinical resources were statistically significant, with the fee-for-service group physicians using consulting services the most and prepaid group physicians using them the least. The results indicate that 1) fee-for-service group structures may reinforce the incentives to share in consultation revenues; 2) prepaid group physicians may experience difficulty becoming integrated into the informal structures of physician practice patterns; and 3) the control of groups over the use of technical hospital resources may be substantially weakened when groups do not own or control the hospitals to which they admit their patients.