Health Care Integration Sees Ballooning Costs for Minor Care Benefit
Over the past few decades, health care integration has absorbed physician practices and hospitals into large health systems, a practice which was heralded as the way to cut health care costs and boosting quality of care.
But integrated health systems appear to be failing on both fronts, according to the results of a new US study published in JAMA. For patients in health systems, care is only marginally improved while costs are significantly higher compared to those at independent practices or hospitals.
In the US, health systems have grown exponentially in size and market share through mergers and acquisitions of physician practices and hospitals and the joining of separate health systems.
Proponents of consolidation have argued over the years that physicians and hospitals working together in integrated, coordinated systems provide better patients care while being more efficient than independent physician practices and hospitals. This would drive quality of care up while keeping spending steady and even driving costs down.
“One of the key arguments for hospital mergers and practice acquisition was that health systems would deliver better-value care for patients. This study provides the most comprehensive evidence yet that this isn’t happening,” said study first author Nancy Beaulieu at Harvard Medical School.
Today, these systems are responsible for a large proportion of the medical care delivered in the US, some employing thousands of physicians. But despite their impact on population health and the economy, little is known about the actual performance of integrated health organisations, the study authors noted.
A lack of detailed data on performance and scale is a key obstacle. The current analysis is believed to be the first comprehensive national study to compare outcomes between patients receiving care within health systems and outside of them, including patients with private insurance as well as traditional Medicare, which is the US health insurance system for those over 65 or which certain disabilities or conditions.
The analysis included a total of 580 health systems, accounting 40% of physicians and 84% of general acute care hospital beds. Academic and large nonprofit systems accounted for a majority of system physicians (80%) and system hospital beds (64%).
System hospitals were larger than hospitals than nonsystem ones, with 67% of system hospitals having more than 100 beds, while only 23% of nonsystem hospitals having more than 100 beds. System physician practices were also more likely to have more than 100 physicians compared with nonsystem practices (74% vs 12%). Integrated systems delivered primary care to 41% of traditional Medicare beneficiaries.
As for quality and cost of care delivered within systems, patients with primary care physicians in health systems reported slightly better satisfaction and overall care experience than patients of independent physicians.
This is the case even though many patients with nonsystem primary care providers also receive some of their care in hospitals or specialist practices that are part of a health system. However, care in systems came at a much higher price, contributing to higher overall spending on health care, the research showed.
Prices for services from physicians and hospitals within health systems were significantly higher than for independent healthcare, the study found. Physician services delivered within health systems cost between 12% and 26% more, compared with independent practices. System-based hospital services cost an average of 31% more than care delivered by independent hospitals.
Small differences in quality combined with large differences in cost of care suggests that health systems have not, on average, realised their potential for better care at equal or lower cost, the researchers said.
Members of the research team have compiled a database from various sources to help characterise these health systems and to link claims data with information on health care providers in and out of health systems. The database, housed at NEBR, will be made available for free to other researchers in the near future.
“There’s no question that large, sophisticated health systems have benefits over independent systems,” said study author David Cutler, Harvard economic professor. “Big systems tend to be less vulnerable to economic downturns and they can provide specialised care that would be difficult to maintain in smaller systems. But the hoped-for cost savings benefits of integrated health systems have not yet materialised.”
Source: Harvard Medical School
