Physician Patient-sharing Networks and the Cost and Intensity of Care in US Hospitals

Background: There is substantial variation in the cost and intensity of care delivered by US hospitals. We assessed how the structure of patient-sharing networks of physicians affiliated with hospitals might contribute to this variation. Methods: We constructed hospital-based professional networks based on patient-sharing ties among 61,461 physicians affiliated with 528 hospitals in 51 hospital referral regions in the US using Medicare data on clinical encounters during 2006. We estimated linear regression models to assess the relationship between measures of hospital network structure and hospital measures of spending and care intensity in the last 2 years of life. Results: The typical physician in an average-sized urban hospital was connected to 187 other doctors for every 100 Medicare patients shared with other doctors. For the average-sized urban hospital an increase of 1 standard deviation (SD) in the median number of connections per physician was associated with a 17.8% increase in total spending, in addition to 17.4% more hospital days, and 23.8% more physician visits (all P < 0.001). In addition, higher "centrality" of primary care providers within these hospital networks was associated with 14.7% fewer medical specialist visits (P < 0.001) and lower spending on imaging and tests (-9.2% and -12.9% for 1 SD increase in centrality, P < 0.001). Conclusions: Hospital-based physician network structure has a significant relationship with an institution's care patterns for their patients. Hospitals with doctors who have higher numbers of connections have higher costs and more intensive care, and hospitals with primary care-centered networks have lower costs and care intensity.