A Physician's Perspective On Vertical Integration

Cost, Quality, and Utilization After Hospital-Physician and Hospital-Post Acute Care Vertical Integration: A Systematic Review

Vertical integration of health systems-the common ownership of different aspects of the health care system-continues to occur at increasing rates in the United States. This systematic review synthesizes recent evidence examining the association between two types of vertical integration-hospital-physician (n = 43 studies) and hospital-post-acute care (PAC; n = 10 studies)-and cost, quality, and health services utilization. Hospital-physician integration is associated with higher health care costs, but the effect on quality and health services utilization remains unclear. The effect of hospital-PAC integration on these three outcomes is ambiguous, particularly when focusing on hospital-SNF integration. These findings should raise some concern among policymakers about the trajectory of affordable, high-quality health care in the presence of increasing hospital-physician vertical integration but perhaps not hospital-PAC integration.

Physician selection for hospital integration: Theoretical considerations and empirical findings

BACKGROUND

The U.S. health care system has seen an increase in hospital-physician integration, with hospitals acquiring increasing numbers of physician practices. This shift has been linked to higher costs without significant improvements in quality.

PURPOSE

This study sought to identify the characteristics of physicians who transitioned from independent practice to hospital integration.

METHODOLOGY/APPROACH

We used physician variables, including quality scores, medical school rankings, years of experience, experience treating socially or medically complex patients, practice style, and location, as well as health care market and county-level variables to understand these determinants using a fixed-effects logistic regression model.

RESULTS

A total of 101,746 physicians representing 66 clinical specialties satisfied our inclusion criteria, of which 3,656 became hospital-integrated between 2018 and 2020. The integrating physicians were generally less experienced, had lower quality scores, and generated less revenue per Medicare patient. Their patients, on average, had higher comorbidity scores, were more likely to be dually eligible, and resided in counties with higher poverty rates.

CONCLUSION

Our findings indicate that the physicians most likely to become hospital integrated are those facing reimbursement pressures due to a complex case mix and the associated challenges of performing well on the quality metrics. We also found some support for the anticompetitive aspects of hospital-physician integration. Our results suggest that hospitals are integrating with a relatively less experienced physician workforce but one that is perhaps more capable of treating clinically and socioeconomically complex patients.

PRACTICE IMPLICATIONS

Hospitals interested in using physician integration strategically to improve care quality should put more emphasis on physician quality. Such an approach has the potential to increase efficiency without sacrificing quality of care.

Hospital-physician integration and clinical volume in traditional Medicare

OBJECTIVE

To test the effect of hospital-physician integration on primary care physicians' (PCP) clinical volume in traditional Medicare.

DATA SOURCES AND STUDY SETTING

Nationwide retrospective longitudinal study using Medicare claims and other data sources from 2010 to 2016.

STUDY DESIGN

We identified 70,000 PCPs, some of whom remained non-integrated and some who became hospital-integrated during this study period. We used an event study design to identify the effect of integration on key measures of physicians' clinical volume, including the number of claims, work-relative value units (RVUs), professional revenue generated, number of patients treated, and facility fee revenue generated.

PRINCIPAL FINDINGS

Per-physician clinical volume declined by statistically and economically significant margins. Relative to the comparison group who remained non-integrated, work RVUs fell by 7% (95% confidence interval [CI]: -8.6% to -5.5%); the number of patients treated fell by 4% (95% CI: -5.8% to -2.6%); and claims volume among PCPs who became hospital-integrated fell by over 15% (95% CI: -16.8% to -13.5%). Though professional revenue declined by $29,165 (95% CI: -$32,286 to -$26,044), this loss was almost entirely offset by increased facility fee revenue of $28,556 (95% CI: 26,909 to 30,203).

CONCLUSIONS

Hospital-physician integration may affect the quantity of clinical services delivered by PCPs to traditional Medicare beneficiaries. Reductions in clinical volume associated with integration may have long-term consequences for the supply of physician services and patient access to primary care. Future research on physician time use and patient access following hospital integration would further add to the evidence base.

Effects of vertical integration on the healthcare system in China: a systematic review and meta-analysis

Vertical integration is one possible way to improve the performance of a healthcare system; however, its effects are inconsistent, and there is a lack of evidence from undeveloped nations. This study aims to systematically review the evidence regarding effects of vertical integration on healthcare systems in China. We searched PubMed, Embase, Cochrane Library, Web of Science, ProQuest Health & Medicine Collection, China Knowledge Resource Integrated Database and Wanfang databases from April 2009 (initiation of new healthcare reform) to May 2021 for randomized controlled trials (RCTs), controlled before and after (CBA) trials, cohort studies and interrupted time series (ITS) trials. Vertical integration in the included studies must involve both primary health institutions and secondary or tertiary hospitals. After screening 3109 records, we ultimately analysed 47 studies, including 27 CBA trials, 18 RCTs and 2 ITS trials. The narrative synthesis shows that all but three studies indicated that vertical integration improved efficiency (utilization and cost of health services), quality of public health services and medical services, health provider-centred outcomes (knowledge and skill) and patient-centred outcomes (patients' clinical outcomes, behaviour and satisfaction). Despite the heterogeneity of vertical integration interventions across different studies, the meta-analysis reveals that it lowered diastolic blood pressure (mean difference (MD) -8.41, 95% confidence interval (CI) -15.18 to -1.65) and systolic blood pressure (MD-5.83, 95% CI -9.25 to -2.40) among hypertension patients, and it lowered HbA1c levels (MD -1.95, 95% CI -2.69 to -1.21), fasting blood glucose levels (MD -1.02, 95% CI -1.53 to -0.50) and 2-hour postprandial blood glucose levels (MD -1.78, 95% CI -2.67 to -0.89). The treatment compliance behaviour was improved for hypertension participants (risk ratio (RR) 1.08, 95% CI 1.04-1.13) and for diabetes patients (RR 1.32, 95% CI 1.08-1.61). Vertical integration in China can improve efficiency, quality of care, health provider-centred outcomes and patient-centred outcomes, but high-quality original studies are highly needed.

Hospital-Physician Integration Is Associated With Greater Use Of Cardiac Catheterization And Angioplasty

In the US in recent years, hospital-physician integration has become a dominant form of consolidation in health care. This transition away from independent practice has raised questions about whether hospital-employed physicians may be more likely than independent physicians to refer patients to high-intensity, hospital-based services. We used Medicare claims data from the period 2013-20 to identify patients who received a new diagnosis of stable angina, a common cardiovascular condition that entails clinical discretion in treatment choice. Using linear probability models and an instrumental variables model, we found that patients whose care was managed by a hospital-integrated cardiologist were no more likely to receive stress tests (an office-based procedure) than those whose care was managed by an independent cardiologist. However, these patients were much more likely to receive high-intensity, hospital-based coronary interventions. These results suggest that hospital-physician integration is an important factor in the intensity of treatment received by patients with stable angina. Policy makers may see these findings as additional impetus for more aggressive antitrust enforcement of integrated arrangements between hospitals and physicians and for other regulatory or payment mechanisms that might deter hospitals from using such arrangements to promote high-intensity treatment unnecessarily.

Vertical integration of oncologists and cancer outcomes and costs in metastatic castration-resistant prostate cancer

BACKGROUND

The share of oncology practices owned by hospitals (ie, vertically integrated) nearly doubled from 2007 to 2017. We examined how integration between hospitals and oncologists affected care quality, outcomes, and spending among metastatic castration-resistant prostate cancer (mCRPC) patients.

METHODS

Using Surveillance, Epidemiology, and End Results-Medicare linked data and the Medicare Data on Provider Practice and Specialty, we identified Medicare beneficiaries who initiated systemic therapy for mCRPC between 2008 and 2017 (n = 9172). Primary outcomes included 1) bone-modifying agents (BMA) use, 2) time on systemic therapy, 3) survival, and 4) Medicare spending for the first 3 months following therapy initiation. We used a differences-in-differences approach to estimate the impact of vertical integration on outcomes, adjusting for patient and provider characteristics.

RESULTS

The proportion of patients treated by integrated oncologists increased from 28% to 55% from 2008 to 2017. Vertical integration was associated with an 11.7 percentage point (95% confidence interval [CI] = 4.2 to 19.1) increased likelihood of BMA use. There were no satistically significant changes in time on systemic therapy, survival, or total per-patient Medicare spending. Further decomposition showed an increase in outpatient payment ($5190, 95% CI = $1451 to $8930) and decrease in professional service payment (-$4757, 95% CI = -$7644 to -$1870) but no statistically significant changes for other service types (eg, inpatient and prescription drugs).

CONCLUSIONS

Vertical integration was associated with statistically significant increased BMA use but not with other cancer outcomes among mCRPC patients. For oncologists who switched service billing from physician offices to outpatient departments, there was no statistically significant change in overall Medicare spending in the first 3 months of therapy initiation. Future studies should extend the investigation to other cancer types and patient outcomes.

Acceptance of Simulated Adult Patients With Medicaid Insurance Seeking Care in a Cancer Hospital for a New Cancer Diagnosis

IMPORTANCE

Although there have been significant increases in the number of US residents insured through Medicaid, the ability of patients with Medicaid to access cancer care services is less well known.

OBJECTIVE

To assess facility-level acceptance of Medicaid insurance among patients diagnosed with common cancers.

DESIGN, SETTING, AND PARTICIPANTS

This national cross-sectional secret shopper study was conducted in 2020 in a random sample of Commission on Cancer-accredited facilities in the United States using a simulated cohort of Medicaid-insured adult patients with colorectal, breast, kidney, and melanoma skin cancer.

EXPOSURES

Telephone call requesting an appointment for a patient with Medicaid with a new cancer diagnosis.

MAIN OUTCOMES AND MEASURES

Acceptance of Medicaid insurance for cancer care. Descriptive statistics, χ2 tests, and multivariable logistic regression models were used to examine factors associated with Medicaid acceptance for colorectal, breast, kidney, and skin cancer. High access hospitals were defined as those offering care across all 4 cancer types surveyed. Explanatory measures included facility-level factors from the 2016 American Hospital Association Annual Survey and Centers for Medicare & Medicaid Services General Information database.

RESULTS

A nationally representative sample of 334 facilities was created, of which 226 (67.7%) provided high access to patients with Medicaid seeking cancer care. Medicaid acceptance differed by cancer site, with 319 facilities (95.5%) accepting Medicaid insurance for breast cancer care; 302 (90.4%), colorectal; 290 (86.8%), kidney; and 266 (79.6%), skin. Comprehensive community cancer programs (OR, 0.4; 95% CI, 0.2-0.7; P = .007) were significantly less likely to provide high access to care for patients with Medicaid. Facilities with nongovernment, nonprofit (vs for-profit: OR, 3.5; 95% CI, 1.1-10.8; P = .03) and government (vs for-profit: OR, 6.6; 95% CI, 1.6-27.2; P = .01) ownership, integrated salary models (OR, 2.6; 95% CI, 1.5-4.5; P = .001), and average (vs above-average: OR, 6.4; 95% CI, 1.4-29.6; P = .02) or below-average (vs above-average: OR, 8.4; 95% CI, 1.5-47.5; P = .02) effectiveness of care were associated with high access to Medicaid. State Medicaid expansion status was not significantly associated with high access.

CONCLUSIONS AND RELEVANCE

This study identified access disparities for patients with Medicaid insurance at centers designated for high-quality care. These findings highlight gaps in cancer care for the expanding population of patients receiving Medicaid.

Primary healthcare professionals' perspective on vertical integration of healthcare system in China: a qualitative study

OBJECTIVE

This study aims to present the perspectives of primary healthcare professionals (PHPs) on the impacts of implementation of vertical integration and on the underlying interprofessional collaboration process on achievement of the policy goals in China.

DESIGN

A qualitative study involving individual interview and group interview was conducted between 2017 and 2018.

SETTING

Primary healthcare institutions (PHIs) in five counties/districts of China.

PARTICIPANTS

The major participants include 12 heads of PHIs (by 12 individual interviews) and 38 PHPs (by 12 group interviews). We also interviewed other stakeholders including 24 health policy-makers (by 5 group interviews) and 5 hospital leaders (by 5 individual interviews) for triangulation analysis.

RESULTS

Our study indicates that PHPs perceived vertical integration has resulted in improved professional competency, better care coordination and stronger capacity to satisfy patients' needs. The positive impacts have varied between integration types. Contributing factors for such progress are identified at administrative, organisational and service delivery levels. Other perceived effects are a loss of autonomy, increased workload and higher turnover of capable PHPs. Higher level hospitals play a dominant role in the interprofessional collaboration, particularly regarding shared goals, vision and leadership. These findings are different from the evidence in high-income countries. Incentive mechanisms and the balance of power with hospitals management are prominent design elements in the future.

CONCLUSIONS

Our findings are particularly valuable for other countries with a fragmented health service system and low competency of PHPs as China's experience in integrated care provides a feasible path to strengthen primary care.

Physician Compensation In Physician-Owned And Hospital-Owned Practices

Physician practices are increasingly being acquired by hospitals and health systems. Despite evidence that this type of vertical integration is profitable for hospitals, the association between these acquisitions and the incomes of physicians in the acquired practices is unknown. We combined national survey data on physician practice ownership with data on physician income to examine whether hospital or health system ownership of physician practices was associated with differences in physician income during 2014-18. During the study period, hospital and health system ownership of physician practices increased by 89.2 percent, from 24.1 percent to 45.6 percent of all physicians in our sample. Among physician practices overall, vertical integration with hospitals or health systems was associated with, on average, 0.8 percent lower income compared with independent physicians after multivariable adjustment. In analyses by physician specialty, vertical integration of physician practices with hospitals or health systems was associated with lower income for nonsurgical specialists, no difference in income for primary care physicians, and slightly higher income for surgical specialists. Although vertical integration of physician practices is a rapidly growing trend, physicians might not directly benefit financially.

The Impact of Health Delivery Integration on Cancer Outcomes

Although integrated health care has largely been associated with increases in prices and static or decreased quality across many disease states, it has shown some successes in improving cancer care. However, its impact is largely equivocal, making consensus statements difficult. Critically, integration does not necessarily translate to clinical coordination, which might be the true driver behind the success of integrated health care delivery. Moving forward, it is important to establish payment models that support clinical care coordination. Shifting from a fragmented health system to a coordinated one may improve evidence-based cancer care, outcomes, and value for patients.

Participation in the Comprehensive Primary Care Plus Initiative

PURPOSE

Comprehensive Primary Care Plus (CPC+) is the largest test of primary care payment and delivery reform. This program aims to strengthen primary care via enhanced and alternative payment, data feedback, learning, and health information technology support for practice transformation for more than 3,000 practices. We analyzed participation rates and how CPC+ practices differ from other primary care practices in CPC+ regions.

METHODS

We assembled a unique data set describing all US primary care practices and compared primary care practices in CPC+ regions, CPC+ applicants, and CPC+ participants. Among CPC+ participants, we compared across 2 model tracks.

RESULTS

Of the primary care practices in CPC+ regions, 22% applied for CPC+ and 15% participated. Practices that applied to CPC+ were diverse, but they were generally larger, more sophisticated electronic health record users, more likely to be owned by a hospital or health system, more likely to have experience with transformation efforts, and more likely to be in urban areas than practices that did not apply. Applicants also generally served slightly healthier and more advantaged Medicare fee-for-service beneficiaries. Differences between practices that applied but did not join CPC+ and CPC+ participants were smaller yet systematic.

CONCLUSIONS

Participants in CPC+ are diverse but not representative of all primary care practices, underscoring the need to further engage practices that are small, independent, in rural areas, and lack experience with practice and payment transformation models, as well as the need to extrapolate evaluation results carefully.

Does Vertical Integration Improve Access to Surgical Care for Medicaid Beneficiaries?

BACKGROUND

Vertical integration is increasingly common among surgical specialties in the US; however, the effect of vertical integration on access to care for low-income populations remains poorly understood. We explored the characteristics of surgical practices associated with vertical integration and the effect of integration on surgical access for Medicaid populations.

STUDY DESIGN

Using a survey of US office-based physician practices, we examined characteristics of 15 surgical subspecialties from 2007 to 2017, including provider sex and specialty, practice payer mix, surgical volume, and county socioeconomic status. Using multivariable logistic regression and time-series analysis, we evaluated practice and provider characteristics associated with vertical integration-our primary outcome-and practice Medicaid acceptance rates-our secondary outcome.

RESULTS

Our analysis included 84,795 unique surgical practices (303,903 practice-years). The rate of vertical integration during the 10-year period was 18.0%, with 72.1% of surgical practices never integrating. Practices that integrated were more likely to accept Medicaid patients than practices that did not (81.0% vs 60.8%, p < 0.001). Accepting Medicaid increased the likelihood of vertical integration relative to practices that did not (odds ratio [OR] 4.20, 95% CI 3.93 to 4.49). Practices that integrated were more likely to accept Medicaid in the future (OR 2.61, 95% CI 2.40 to 2.83), even after adjusting for previous Medicaid acceptance and hospital and time fixed effects.

CONCLUSIONS

Surgical practices caring for the underinsured are more likely to join larger health care systems, driven by market characteristics. Vertical integration is associated with future increased rates of Medicaid acceptance among practices, allowing for increased access to surgical care for vulnerable, low-income patients. The potential benefit of increased surgical access for low-income beneficiaries from vertical integration must be balanced with the potential for increased prices.