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In 2016, the top 10 physician groups reported an average of $10.1 billion in Medicare charges according to Definitive Healthcare's physician group data. The 10 physician groups reporting the greatest Medicare payments received an average of $304 million.
Fig 1 Data from Definitive Healthcare's Physician Groups platform. Medicare Data from 2016 Provider Utilization and Payment Data Physician and Other Supplier Public Use File.
Research from the New England Journal of Medicine found that physician group accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP) generated greater savings than hospital ACOs between 2012 and 2015. During the same period, hospital-integrated ACOs did not produce savings on average. Physician group ACOs net Medicare savings totaled approximately $256 million in 2015 alone. Reductions in spending increased the longer a physician group ACO reported participation in the program, according to the study.
The MSSP was launched by the Centers for Medicare and Medicaid Services (CMS) in 2010 as an incentive for HCPs to improve care coordination through working closely with suppliers. Last year, a study from Avalere found that MSSP ACOs generated significantly less savings than originally estimated by the Congressional Budget Office when the program first launched, regardless of affiliation with a physician group or hospital.
Physician groups often face difficulties in care coordination compared to hospitals due to their small size and focus on a single specialty. The MSSP offered a chance for physician groups to stay competitive, keeping care costs low and improving patient outcomes. Generally, their flexibility gives physician groups an advantage over hospitals in areas like operating hours, service offerings, and charity care spending, which could have a role in why they performed better than hospitals in the MSSP.
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