Economic Impact of Converting an Interventional Pain Medicine Physician Office-Based Practice into a Provider-Based Ambulatory Pain Practice

Abstract

Background: One consequence of the shifting economic health care landscape is the growing trend of physician employment and practice acquisition by hospitals. These acquired practices are often converted into hospital- or provider-based clinics. This designation brings the increased services of the hospital, the accreditation of the hospital, and a new billing structure verses the private clinic (the combination of the facility and professional fee billing). One potential concern with moving to a provider-based designation is that this new structure might make the practice less competitive in a marketplace that may still be dominated by private physician office-based practices. The aim of the current study was to evaluate the impact of the provider-based/hospital fee structure on clinical volume. Objective: Determine the effect of transition to a hospital- or provider-based practice setting (with concomitant cost implications) on patient volume in the current practice milieu. Setting: Community hospital-based academic interventional pain medicine practice. Study Design: Economic analysis of effect of change in price structure on clinical volumes. Methods: The current study evaluates the effect of a change in designation with price implications on the demand for clinical services that accompany the transition to a hospital-based practice setting from a physician office setting in an academic community hospital. Results: Clinical volumes of both procedures and clinic volumes increased in a mature practice setting following transition to a provider-based designation and the accompanying facility and professional fee structure. Following transition to a provider-based designation clinic visits were increased 24% while procedural volume demand did not change. Limitations: Single practice entity and single geographic location in southeastern United States. Conclusions: The conversion to a hospital- or provider-based setting does not negatively impact clinical volume and referrals to community-based pain medicine practice. These results imply that factors other than price are a driver of patient choice. Key words: Economics of interventional pain medicine, hospital-based ambulatory practice, provider-based ambulatory practice, physician-office based practice, price in-elasticity of health care