The Effects of Ownership and Contracting Relationships Between Primary Care Physicians and Health Systems in Massachusetts

We examined the effects of ownership and contracting relationships between primary care physicians (PCPs) and large health systems on care utilization and cost in Massachusetts from 2017 to 2021. Thirty-nine percent of treated patient-years were associated with ownership relationships and 61.0% with contracting relationships. A patient’s PCP entering an ownership relationship increased the probability of admission to a within-system hospital by 0.75ppt (95% CI [0.54, 0.95]; p < .001) and to a top price hospital by 4.08ppt (95% CI [2.07, 6.08; p < .001); the effect of a contracting relationship was 0.52ppt (95% CI [0.39, 0.65]; p < . 001) and 2.98ppt (95% CI [1.26, 4.71]; p < .001), respectively. Ownership and contracting relationships increased the probability of outpatient follow-up with a within-system physician after hospitalization by 2.91ppt (95% CI [0.26, 5.56]; p = .032) and 2.61ppt (95% CI [0.57, 4.65]; p = .012), respectively. Our findings that both relationships exhibit similar effects suggest that policymaking and research on vertical consolidation may need to broaden beyond outright ownership.