Does Joining Group Practice Increase Physicians’ Insurance Revenue?

Presenter: Yu-Ping Wen, Chang Gung University

Abstract

As one way to practice medicine, group practice has been around for a long time. Newhouse (1973) suggested that group practice had the advantages of lowering costs and increasing leisure. Getzen (1984) suggested “brand name” as a major reason for group practice. Lin et al. (2006) observed that in 2002 physicians in group practice in Taiwan enjoyed higher claims, no matter the group practice is single-specialty or multiple-specialties. The authors took it as a strong support for policy encouraging group practice.

However, in 2002 only 11% Taiwanese physicians joined multiple-specialties group practice (Lin et al. 2002). Only 23.26% clinics in Taiwan were group practice during 2003 (Yang et al., 2006), among which most clinics were of single-specialty and small scale. If joining group practice can increase income, why did not more physicians join group practice? If multiple-specialties group practice can increase revenue, why were most group practice single-specialty?

Past studies fail to exclude the possibility that physicians join group practice to increase leisure. To clarify the relation between group practice and physician revenue, this study aims to answer the following questions: 1. What is the ratio that physician transfer between single and group practice? 2. Is physician insurance revenue positively associated with the decision joining group practice? 3. Does the decision joining group practice increase physician insurance revenue?

This study follows 11,230 physicians who accepted Taiwan health insurance (NHI) and worked in clinics in 1999 to build up their practice history through 2006. Individual monthly insurance revenues are estimated in accordance to their practice types—single or solo practice. The effect of lagged revenue on the decision of joining group practice is analyzed with panel logit model. The effect of joining group practice on current insurance revenue is analyzed with panel OLS.

Preliminary results show that lagged insurance revenue is positively associated with the decision of joining group practice. We cannot rule out that high-income practitioners choose to join group practice.