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Multiple-site physician practices and their effect on service distribution.

Physician practice location has received intensive scrutiny in the research literature. Frequently, large geographical units like counties, medical service regions, or even states have formed the basis of analysis (Ernst and Yett 1985, 184-89; Knapp and Blohowiak 1989, 1110). At this scale, rural/urban differences in physician supply have been emphasized (Joseph and Phillips 1984, 82).

Over the last several decades, however, concern for the availability of care to poor and minority populations within central cities has increased. Research on intraurban physician location patterns has identified zones of physician shortage within metropolitan areas. Race and income characteristics of local populations have been studied, along with hospital location and commercial land availability, as factors associated with variations in physician supply. Although the view of physicians as "entrepreneurs" who "market" their services has been controversial (Culliton 1986), research on intraurban physician location suggests that physicians locate their practices in response to market forces as the outcome of strategies that can be studied in the context of location theory.

From the point of view of the service provider, three locational responses to changing market forces are described in location theory: changing capacity in situ, relocating, or branching (Townroe 1969). Branching is an important strategy when capacity cannot be increased at a current location that remains a valuable service site or when the ability to serve new and existing markets can be improved or sustained by locating second-order service sites. The purpose of this research is to explore multiple-site practices as a form of branching for medical service delivery. In a multiple-site practice, a physician regularly schedules office appointments at more than one location within a medical service region.

This study evaluates the number and characteristics of such practices based on a survey of urologists within the Hartford, Connecticut medical service area and adjacent service areas to document the distribution of practice capacity under multiple-site arrangements. The population, income, and medical care characteristics of communities where first-order, second-order, or no practice sites exist are also analyzed to evaluate the factors associated with second-order site location. By analyzing these aspects of service delivery, this study will advance the understanding of physician location patterns. To the extent that multiple-site arrangements are common and involve sizable allocations of provider time, analysis of multiple-site practice patterns is important for the accurate assessment of medical service availability and evaluation of current policy issues related to physician location decisions.

BACKGROUND

Researchers have relied on two major models to explain physician location patterns. The first, the market potential model, states that when demand is distributed across a region, service providers will locate at the point of maximum "possible contact with markets" (Harris 1954, 421; Senior 1979). Possible contact is positively associated with the size of the local and neighboring populations and inversely associated with the distance between populations in adjacent neighborhoods and the neighborhood in question. Research on intraurban physician location patterns hypothesizing that physician supply in a census tract or health area is positively associated with the size of the area's population implicitly adopts this model (Elesh and Schollaert 1972; Guzick and Jahiel 1976; Knapp and Blohowiak 1989).

Most of the research on physician location assumes that the negative effect of distance on utilization is complete and does not take into account population and income characteristics of adjacent geographical units. Elesh and Schollaert experimented with several market potential formulations that assumed movement across census tract boundaries but concluded that these formulations did not increase the explanatory power of their analysis (1972, 246). The market potential formulations allowing for cross-boundary travel, however, have been very important in modeling geographical patterns of accessibility to care (Knox 1978; Joseph and Bantock 1982; Cromley and Cromley 1988). The importance of travel out of the immediate locality is also recognized in research focusing on patterns of medical care availability and utilization in rural and nonmetropolitan areas adjacent to large cities (Kleinman and Makuc 1983; Kindig and Movassaghi 1989). Although population size has consistently been an important correlate of physician supply, the associations between physician supply and income and other sociodemographic variables are less straightforward.

In the Elesh and Schollaert study, one of the earliest studies examining intraurban physician location patterns, data for Chicago in 1960 showed a significant lack of physicians in census tracts where the population was more than 90 percent black (1972). Further, an inverse relationship between income and physician supply was noted when income was measured as percent of population whose annual incomes were above $6,000. When the income threshold was increased, the effect of income on physician supply was positive, and the effects of race and other sociodemographic variables were reduced.

More recent studies emphasize payment arrangement as a key determinant of the market for physician services. Current theory suggests a dual market for physician services: one where physicians set charges and are paid by patients, and the other where physicians must accept a payment set by a third-party payer such as Medicaid or Medicare (Sloan, Cromwell, and Mitchell 1978). One model of physician performance in the dual market suggests that physicians will expand their practices in the less economically desirable market only when competitive pressures reduce private-pay demand. Empirical studies have not supported this hypothesis. Instead, a strong inverse relationship exists between physician supply and Medicaid participation rates (Fossett and Peterson 1989).

In areas of high physician supply, it is common to find a few large "Medicaid practices." One explanation offered is that residential segregation and the limited mobility of Medicaid populations make it difficult for physicians who have left or are located outside neighborhoods where Medicaid recipients are

clustered to increase their Medicaid shares without relocating (Fossett and Peterson 1989, 388). This explanation is consistent with the notion that suppliers can influence demand in particular markets through location.

The implication of these findings is that some physicians are clustered in or near some of the poorest neighborhoods in the city. A possible explanation for the concentration of physicians in selected inner-city neighborhoods is that physician offices cluster around the large inpatient care facilities found in urban centers. Kaplan and Leinhardt (1973) tested three models to predict the number of physicians in census tracts in Pittsburgh, Pennsylvania in 1970. Proximity to hospitals was identified as a significant variable positively associated with physician supply. Census tract income alone was negatively correlated with physician supply but was unrelated to it when other variables were controlled. Elesh and Schollaert (1972) suggested that hospital location has a greater influence on specialist practice location than on primary care practice location.

The availability of commercially zoned land has also been shown to predict the suitability of an area for establishing a medical practice (Kaplan and Leinhardt 1973). In a more recent study of Portland, Oregon, Knapp and Blohowiak (1989) classified hospital beds and commercial land as "nontransferable input supply variables" and found that they were significant predictors of an area's physician supply. That "the bulk of possible service locations are physically more accessible to low- than to high-income groups" within the typical North American city has been recognized in the general literature on urban structure and access to public services (McLafferty 1982).

Nevertheless, forces arising from the restructuring of the nation's urban areas and encouraging the dispersal of office locations are also at work. In one of the few disaggregate longitudinal analyses of physician relocation within an urban area, an outward, radial movement of general practitioners was documented in Detroit from 1950 to 1980 (Nathalang 1988). This was interpreted as being associated with the outward movement of population in post-World War II suburbanization. It may also reflect the increasing concentration of poor and minority populations in the central city. A 45 percent decline in the availability of office-based primary care physicians was noted in impoverished neighborhoods of ten urban areas from 1963 to 1980, although physician availability overall increased in poverty and nonpoverty areas (Kindig, Movassaghi, Dunham, et al. 1987).

A study of physician practice locations in a small metropolitan area from 1870 to 1988 documented three distinct locational patterns that developed over time (Mattingly 1991). Practice sites were dispersed in the central business district before the turn of the century. This was followed by increasing clustering of practices at two locations in the city center through 1955. In the postwar period, the central-city clusters disappeared while several new and more dispersed clusters emerged. The changing locational patterns were interpreted as "responses to changing medical technology and evolution of the urban area that affected site and area attractiveness" (Mattingly 1991, 465).

In contrast to market potential approaches suggesting that service providers will locate to maximize access to the market subject to the constraint of finding suitable office space, central place theory (Christaller 1966) emphasizes the importance of threshold demand levels and the range of a service -- the maximum distance a person would be willing to travel to obtain the service -- in explaining the service delivery landscape. Gober and Gordon (1980) based their analysis of physician distribution in Phoenix, Arizona in 1970 on central place theory. They hypothesized that primary care practitioners, as providers of lower-order services, would be spread throughout the urban region. Specialists, as providers of higher-order services, would be concentrated near the metropolitan center. Hospital-based specialists would be clustered around inpatient institutions. Their data indicated, however, that the presence of pediatricians and internists was much greater in the center than central place theory would predict and that nearly all physicians were located near hospitals. They concluded that this distribution pattern "blatantly violated" the principles of location theory in a free market.

Central place models generally assume that population is dispersed throughout a region and that there are no barriers to establishment of service centers. These assumptions, perhaps appropriate for locating service activities like convenience stores, are less satisfactory for modeling physician office location patterns. On the supply side, land use regulations frequently prohibit establishment of offices in bedroom communities or severely limit the availability of sites. On the demand side, potential patients are unlikely to be distributed uniformly by residence. The clustering of service centers is a pattern consistent with location theory when demand is relatively inelastic and the service user must pay transportation costs to obtain the service. Although physician practices were considered by Gober and Gordon to be clustered with respect to the distribution of residences, they may have been more uniformly distributed across other activity sites -- such as major employment centers or schools -- from which patients might travel for medical care.

Providers clustered at particular nodes within a metropolitan area serve a larger, more nebulous geographic area than they would if each had a complete spatial monopoly over a smaller region. Whenever demand is not sufficient to meet the threshold requirements of all providers, it is not necessarily true that some competitors will be forced from the marketplace. Studies of central place systems have confirmed the functioning of periodic markets as a response to insufficient market demand (Haggett, Cliff, and Frey 1977, 153-7). In a periodic market, providers travel from demand site to demand site over time. By pooling together demand from several local markets, services that would otherwise not be available can be sustained in these market areas. Accordingly, the analysis of multiple-site practices and the market characteristics of the places where these practices are located should provide insight into multiple-site practices as a locational strategy for service delivery.

METHODS

STUDY AREA AND DATA

A region in north central Connecticut centered around Hartford was selected as the study area for this analysis. This 38-town region was one of the five Health Systems Agency areas defined in the state under the Health Planning and Resources Development Act of 1974. The town is the basic unit of local government in New England states, where there are no unincorporated areas. Hartford is the capital of Connecticut and a service center, but the region has a fairly diversified economy that includes manufacturing and, in the peripheral towns, agriculture. The 1990 population of the region was approximately 950,000 (Office of Policy and Management 1991).

There are ten acute care hospitals in eight towns across the region. Hartford is clearly the dominant center for inpatient care within the region. In terms of proximity to care, this favors the region's minority and low-income populations. Although Hartford has 14.7 percent of the region's total population, it accounts for 60.7 percent of the region's black and Hispanic populations (Office of Policy and Management 1991). Hartford's population has the lowest per capita income in the region (Office of Policy and Management 1990).

Earlier cited research on medical care organization stresses the importance of differentiating physician supply by specialty and type of practice for analytical purposes. To evaluate the full impact of multiple-site practices on service distribution, it was considered appropriate to focus on a specialty that provides both medical and surgical services so that market and hospital characteristics of communities would exert some influence on practice location. The specialties that fit this requirement particularly well include obstetrics/gynecology, otolaryngology, and urology. Urology was eventually selected for this initial investigation because the number of practitioners in the study area was sufficiently large, which was not the case with otolaryngology. The field has a well-defined set of services with little overlap to other specialties which would have posed problems in the case of OB/GYN services also provided by family practitioners in the service area.

An initial investigation of the supply of urologists in the study area identified 35 practitioners whose practices were based in the study area. This translates into a simple physician/population ratio of 3.5 per 100,000 for the region, compared to the GMENAC desired ratio of 3.2 for the nation for 1990 (Graduate Medical Education National Advisory Committee 1981, 13-14). To the extent that these ratios can be used as indicators, the study area would be considered a mature and competitive market for urology services.

DATA COLLECTION

A one-page mailed survey was sent to all urologists practicing in the study area during September 1990. The survey was also mailed to as many urologists as could be identified who were based outside the study area in Connecticut and in Springfield, Massachusetts, a major center just north of the study area. Physicians outside the immediate study area were included in the survey to identify physicians who might have second-order practice sites within the study area.

The survey asked respondents to list by street address all locations where they regularly conducted office visits and any plans to open or close practice at an existing location within six months. Respondents indicated when and where they practiced by half-day blocks of time for Monday through Saturday. A pilot test of the survey instrument indicated that half days were meaningful time blocks for describing aspects of physician practice. Respondents were also asked to estimate the number of appointment slots they regularly scheduled per half day. The responses of individual physicians were grouped by practice.

Responses were obtained from all of the 35 physicians based in the study area. One physician nearing retirement who had sharply curtailed his practice and one physician whose hospital-based practice was limited to pediatrics were excluded from the study. The remaining 33 physicians represented 17 group practices. The survey also identified eight physicians in three groups based outside the study area who reported regularly practicing in a town within the study area.

Data on town demographic and socioeconomic characteristics were obtained from the 1990 U.S. Census and Connecticut State Data Center documents (Office of Policy and Management 1991; Office of Policy and Management 1990). Data on hospitals, hospital beds, and town zoning characteristics were also gathered so that the associations between these town attributes and physician supply could be assessed (Health Care Financing Administration 1988; Havens and Emerson, Inc. 1989, 3.4.12).

DATA ANALYSIS AND RESULTS

MULTIPLE-SITE PRACTICE PATTERNS

First-order practice location was defined as the location at which a solo practitioner or physician group spent most half-day sessions. For every practice, there was a single and dominant modal location. Identification of the first-order practice site was straightforward for the ten physicians in solo practice. For group practices, it was possible to determine the first-order practice location and the number and locations of second-order sites by aggregating individual responses of the physicians in a group practice. Not every physician within a group practicing at multiple sites practiced at the same set of locations. In almost all cases, both first- and second-order practice sites were in office buildings and not in hospitals.

Data on multiple-site practice patterns reveal that this is a very common arrangement within the medical service area. Of the 17 groups having first-order practice sites in the study area, 11 practiced at more than one site. These 11 groups accounted for 27 of the 33 physicians included in the study. All seven group practices practiced at multiple sites while only 40 percent of the ten solo physicians practiced at multiple sites.

Although an association could be traced between solo versus group practice and multiple-site practice, no association was found between payment arrangement and multiple-site practice. Connecticut has passed legislation prohibiting balance billing of low-income elderly (Holahan and Zuckerman 1989, 67). Only four doctors representing three groups reported that they did not accept Medicare assignment for all patients. Only three doctors representing two groups reported that they did not accept Medicaid assignment.
Table 1: Practice Characteristics

 Number of Number of
 Practices Physicians

Group Practice 7 23

Multiple site 7 23
1 Second-order site 3 2,2,4
2 Second-order sites 1 3
3 Second-order sites 0 --
4 Second-order sites 2 2,4
5 Second-order sites 1 6

Single site 0 --

Solo Practice 10 10

Multiple site 4 4
1 Second-order site 4 1,1,1,1
2 Second-order sites 0 --
3 Second-order sites 0 --
4 Second-order sites 0 --
5 Second-order sites 0 --

Single site 6 6

All Practices 17 33

Multiple site 11 27
* Does not accept Medicare 2 3
assignment for all patients
* Does not accept Medicaid 1 2
assignment

Single site 6 6
* Does not accept Medicare 1 1
assignment for all patients
* Does not accept Medicaid 1 1
assignment


Seven of the 11 groups practiced at only one second-order location. The three groups reporting four or five second-order practice sites included two of the largest group practices in the region and had two, four, and six physicians, respectively. All three groups had first-order locations in Hartford, the town with the largest population and a central location in the study area. In no case was a group's second-order practice site located in the same town as the first-order practice site or other second-order practice site of the same group.

The existence of the second-order sites increased the number of towns where urology visits were made from 6 to 19 or from one-sixth to one-half of the towns in the study area. None of the second-order sites of practices based in the Hartford study area were located outside of it. Hartford and Bloomfield, adjacent to Hartford's northwest boundary, were two centers of first-order site activity that also had one second-order site each. The Hartford second-order site was a satellite of a Bloomfield-based practice. The Bloomfield second-order site was a satellite of a Hartford-based practice. These were the only two towns having both first-order and second-order practice sites within them.

Physicians from three groups whose first-order locations were outside the study area practiced at second-order sites within the study region. Each group had only one second-order site within the region and these sites were in different towns located at the periphery of the study area. Interestingly, in each of these towns at least one second-order site established by a practice based in the study area was also located.

In order to evaluate the impact of multiple-site practices on the availability of physician services, it was necessary to compute some measure of the volume of service that could be provided at each site. This computation was performed by multiplying the average number of appointment slots scheduled for a particular physician by the number of half-day sessions spent by that physician at a particular location. Summing this product for all physicians providing visits at locations in a given town produced a measure of the aggregate practice capacity at that town.

The total weekly appointment capacity in the study area was 2,661. Of those, 2,035 (77 percent) were provided at first-order sites and 626 (23 percent) were provided at second-order sites. Hartford first-order sites accounted for 40 percent of the total appointment capacity in the region. While Hartford dominated in first-order appointment capacity, two towns accounted for substantial shares of second-order appointment capacity. Enfield, north of Hartford on the Massachusetts border near Springfield, had 23 percent of all second-order appointment capacity and Glastonbury, southeast of Hartford across the Connecticut River, had 18 percent of all second-order appointment capacity in the region. Second-order sites accounted for 10 percent to 40 percent of the total appointment capacity of a practice at all its locations.

The distribution of second-order practice sites follows a pattern of interstitial fill around the main inpatient care centers. Towns on the periphery of the medical service area are largely devoid of practice sites. Where towns on the border of the service area do have second-order sites, they are most often also towns served by providers based in neighboring medical service regions. Other community characteristics were also considered in relation to the distribution of practice sites.

COMMUNITY CHARACTERISTICS OF TOWNS BY PRACTICE TYPE

Three groups of communities were recognized by this analysis: those where first-order practices existed (N = 6), those where only second-order practices existed (N = 13), and those where there was no local practice (N = 19). Hartford and Bloomfield were considered first-order towns even though second-order sites were present. Each had only one second-order site that accounted for a very small percentage of the total practice of the town.

The market potential of each town weighted by per capita income was used to analyze the relationship between practice capacity and market attractiveness. This measure in varying forms is frequently used in geographical analysis of service activity (Senior 1979). The measure was calculated here as:

M|P.sub.i~ = |w.sub.i~|P.sub.i~ + |summation of~(|w.sub.j~|P.sub.j~/|D.sub.ij~)

j|element of~|N.sub.i~ (1)

where

M|P.sub.i~ = weighted market potential of community i;

|P.sub.i~ = population of community i;

|P.sub.j~ = population of other communities j in the region;

|w.sub.i~, |w.sub.j~ = income weighting factors for community populations equal to the median family income of the community divided by 10,000;

|D.sub.ij~ = the distance separating communities i and j; and

|N.sub.i~ = the set of all communities (j |is not equal to~ i).

First-order practice sites appear to be located in towns that have high weighted market potential. The second-order sites provide lower levels of practice capacity across the set of towns in the region with intermediate weighted market potential. The towns having the lowest weighted market potential generally have no practice capacity. The two outlier towns having high weighted market potential but lower or no practice capacity are East and West Hartford, both adjacent to the major medical centers in Hartford.

Community characteristics that affect physician location in general also affect the location of second-order sites. Based on population alone, the 13 towns with second-order sites represent about the same size market as the six towns with first-order sites. The socioeconomic and demographic compositions of these populations are quite different, however.

Communities where practices have organized second-order sites have a greater number of elderly and incomes higher than the regional average. In fact, the 13 communities with second-order sites account for more than half of the elderly population of the region. The communities with first-order sites have lower than average incomes as well as average numbers of minorities in their populations double the average for all towns in the region.

This arrangement is an advantage for low-income and minority populations, at least in terms of the relative location of physician services. It would also seem to contradict the "inverse care law" coined by Hart (1971, 412), that "the availability of good medical care tends to vary inversely with the need of the population served." In the case of Hartford, total population has declined but the low-income population has increased since 1970 (Office of Policy and Management 1991). The concentration of practice capacity in Hartford reflects in part the persistence of earlier physician clustering in the urban center (Mattingly 1991) and in part the continuing importance of the hospitals in Hartford in physician location decisions. The presence of hospitals and TABULAR DATA OMITTED of commercially zoned land as variables affecting the availability of suitable practice space is related to the location of first- and second-order practice sites. There is a close association between the distribution of the 17 first-order practice sites and the distribution of hospitals and hospital beds. Among the towns with hospitals, only those with the smaller hospitals did not have first-order practice sites.

The location of second-order sites in many towns that do not have hospitals suggests that different types of service may be provided at first- and second-order sites. It may be that the second-order sites have emerged primarily as convenient locations where medical services are delivered while the surgical cases and their office visit requirements are managed out of the first-order sites. Each physician surveyed in this study delivers inpatient care primarily at a single hospital within the region, so multiple-site practices are not an attempt to match office locations to multiple hospital practice settings. More research would be needed to investigate the nature of activities carried out at the different sites.

Very little difference was found in the average availability of industrial/commercial-zoned land across the three groups of communities, although the larger cities had somewhat higher percentages. The average percentage for towns without practices of any kind was skewed by the inclusion of East Hartford, a community adjacent to Hartford with a large market but no practice, because that town's land use is heavily dominated by industrial and commercial activity with close to 35 percent of the land zoned for those uses.

CONCLUSION

Multiple-site practices are a common form of practice among urologists in the study area. Given that all of the group practices in the survey reported practicing at multiple sites, this pattern may have been adopted because expansion of practice capacity at the current site -- perhaps by bringing another physician into the group -- was not possible. If that were the case, the practice could have elected to relocate entirely. If there were advantages to the present location such as a favorable tenure arrangement, proximity to hospitals or ancillary services, or familiarity to patients, it might be desirable to maintain practice at the present site and expand capacity elsewhere, particularly if facility costs were lower and existing patients could be served at lower personal travel expense. Second-order sites would, therefore, be expanding the aggregate appointment capacity of the practice. If appointment capacity at second-order sites could have been accommodated at the first-order site, second-order sites would represent a locational shift of existing capacity. It is also possible that expansion and shift of capacity are both occurring.

The fact that multiple-site practice has not yet resulted in a major redistribution of practice capacity within the study area suggests that capacity constraints at first-order offices were probably not the major factor explaining the development of this practice. For some practices, as little as 10 percent of appointment capacity was associated with the second-order site. Also, a number of solo practitioners were involved in multiple-site practice. Given the competitiveness of the market for urology services in the study area and location of practice sites by physicians based outside the Hartford medical service area in the region, the establishment of second-order sites has probably been important as a strategy to improve the ability to serve markets.

In the case of multiple-site practices in Hartford, it is clear that the second-order practice sites were located in towns representing the "next best" markets in the region in terms of population and income characteristics. Many of the characteristics associated with the location of first-order practice sites are associated with the location of second-order sites. Further, the fact that second-order sites do not by and large exist in towns where first-order sites were present suggests that second-order sites were located to penetrate communities with no local service.

Because the communities with second-order sites represent fairly large and attractive markets in and of themselves, it does not seem plausible that multiple-site practices are functioning as a form of periodic market center -- at least in this service area -- although they could be functioning as such elsewhere and would be an important strategy to consider for improving medical care accessibility in some rural areas. The pattern of second-order sites instead suggests a decentralizing response to changes in intraurban population distribution noted in other studies (Mattingly 1991) but constrained by the practitioner's tie to the inpatient care facility.

It might be argued from the results that multiple-site practices are, in this instance, detrimental to inner-city residents because they reduce somewhat the volume and frequency of service locally. However, it cannot be assumed that if multiple-site practices could somehow be prohibited, all of the visit capacity associated with a particular provider would be wholly retained in the inner-city community. In a competitive market, practices might not continue to be viable if multiple sites could not be maintained.

The findings do underscore, however, the significance of medical care facilities as a factor affecting provider location. The main reason that inner-city communities have a high presence of physicians is because inner-city hospitals and clinics provide important practice environments. Given that many urban hospitals are under extreme financial pressure on both the cost and reimbursement sides, ensuring the continuing viability of inner-city hospitals could be the public policy most important for maintaining the availability of physician services in inner-city communities.

Models of medical resource availability have been modified to reflect the possibility that local resources may in fact be serving nonlocal populations when some patients travel to the local area for medical care. The analysis of multiple-site practices suggests that "local" resources may, in addition, be serving nonlocal populations if providers travel to other practice sites. Taking multiple-site arrangements into account affects measurements of medical care availability by counting service capacity where services are delivered and ignoring it where they are not. Current policy debates surrounding physician location decisions and government programs to influence such decisions, including the encouragement of physicians to practice in inner-city neighborhoods and rural communities, refer to these measurements. The study of multiple-site practices advances the understanding of physician location patterns and contributes to the formation of policies that might be effective in altering them.

ACKNOWLEDGMENTS

The authors acknowledge the assistance of Robert Andrle, Alex Bothel, and Tracey Smith in preparing the figures for this article.

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Date:Oct 1, 1993
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