A systematic review of vertical integration and quality of care, efficiency, and patient-centered outcomes.

BACKGROUND: Small independent practices are increasingly giving way to more complex affiliations between provider organizations and hospital systems. There are several ways in which vertically integrated health systems could improve quality and lower the costs of care. But there are also concerns that integrated systems may increase the price and costs of care without commensurate improvements in quality and outcomes. PURPOSE: Despite a growing body of research on vertically integrated health systems, no systematic review that we know of compares vertically integrated health systems (defined as shared ownership or joint management of hospitals and physician practices) to nonintegrated hospitals or physician practices. METHODS: We conducted a systematic search of the literature published from January 1996 to November 2016. We considered articles for review if they compared the performance of a vertically integrated health system and examined an outcome related to quality of care, efficiency, or patient-centered outcomes. RESULTS: Database searches generated 7,559 articles, with 29 articles included in this review. Vertical integration was associated with better quality, often measured as optimal care for specific conditions, but showed either no differences or lower efficiency as measured by utilization, spending, and prices. Few studies evaluated a patient-centered outcome; among those, most examined mortality and did not identify any effects. Across domains, most studies were observational and did not address the issue of selection bias. PRACTICE IMPLICATIONS: Recent evidence suggests the trend toward vertical integration will likely continue as providers respond to changing payment models and market factors. A growing body of research on comparative health system performance suggests that integration of physician practices with hospitals might not be enough to achieve higher-value care. More information is needed to identify the health system attributes that contribute to improved outcomes, as well as which policy levers can minimize anticompetitive effects and maximize the benefits of these affiliations.

Evaluating the Impact of Integrated Care on Service Utilization in Serious Mental Illness.

Serious mental illness (SMI) affects 5% of the United States population and is associated with increased morbidity and mortality, and use of high-cost healthcare services including hospitalizations and emergency department visits. Integrating behavioral and physical healthcare may improve care for consumers with SMI, but prior research findings have been mixed. This quantitative retrospective cohort study assessed whether there was a predictive relationship between integrated healthcare clinic enrollment and inpatient and emergency department utilization for consumers with SMI when controlling for demographic characteristics and disease severity. While findings indicated no statistically significant impact of integrated care clinic enrollment on utilization, the sample had lower levels of utilization than would have been expected. Since policy and payment structures continue to support integrated care models, further research on different programs are encouraged, as each setting and practice pattern is unique.

The Marginal Costs of Adverse Drug Events Associated With Exposures to Anticoagulants and Hypoglycemic Agents During Hospitalization.

BACKGROUND: Anticoagulants and hypoglycemic agents are 2 of the most challenging drug classes for medical management in the hospital resulting in many adverse drug events (ADEs). OBJECTIVE: Estimating the marginal cost (MC) of ADEs associated with anticoagulants and hypoglycemic agents for adults in 5 patient groups during their hospital stay and the total annual ADE costs for all patients exposed to these drugs during their stay. RESEARCH DESIGN AND SUBJECT: Data are from 2010 to 2013 Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases and Medicare Patient Safety Monitoring System (MPSMS). Deidentified patients were linked using probabilistic matching in the same hospital and year for 5 patient groups. ADE information was obtained from the MPSMS using retrospective structured record review. Costs were derived using HCUP cost-to-charge ratios. MC estimates were made using Extended Estimating Equations controlling for patient characteristics, comorbidities, hospital procedures, and hospital characteristics. MC estimates were applied to the 2013 HCUP National Inpatient Sample to estimate annual ADE costs. RESULTS: Adjusted MC estimates were smaller than unadjusted measures with most groups showing estimates that were at least 50% less. Adjusted anticoagulant ADE costs added >45% and Hypoglycemic ADE costs added >20% to inpatient costs. The 2013 hospital cost estimates for ADEs associated with anticoagulants and hypoglycemic agents were >$2.5 billion for each drug class. CONCLUSIONS: This study demonstrates the importance of accounting for confounders in the estimation of ADEs, and the importance of separate estimates of ADE costs by drug class.

Corporate governance and the adoption of health information technology within integrated delivery systems.

BACKGROUND: Although several previous studies have found "system affiliation" to be a significant and positive predictor of health information technology (IT) adoption, little is known about the association between corporate governance practices and adoption of IT within U.S. integrated delivery systems (IDSs). PURPOSES: Rooted in agency theory and corporate governance research, this study examines the association between corporate governance practices (centralization of IT decision rights and strategic alignment between business and IT strategy) and IT adoption, standardization, and innovation within IDSs. METHODOLOGY/APPROACH: Cross-sectional, retrospective analyses using data from the 2011 Health Information and Management Systems Society Analytics Database on adoption within IDSs (N = 485) is used to analyze the correlation between two corporate governance constructs (centralization of IT decision rights and strategic alignment) and three IT constructs (adoption, standardization, and innovation) for clinical and supply chain IT. Multivariate fractional logit, probit, and negative binomial regressions are applied. FINDINGS: Multivariate regressions controlling for IDS and market characteristics find that measures of IT adoption, IT standardization, and innovative IT adoption are significantly associated with centralization of IT decision rights and strategic alignment. Specifically, centralization of IT decision rights is associated with 22% higher adoption of Bar Coding for Materials Management and 30%-35% fewer IT vendors for Clinical Data Repositories and Materials Management Information Systems. A combination of centralization and clinical IT strategic alignment is associated with 50% higher Computerized Physician Order Entry adoption, and centralization along with supply chain IT strategic alignment is significantly negatively correlated with Radio Frequency Identification adoption PRACTICE IMPLICATIONS: : Although IT adoption and standardization are likely to benefit from corporate governance practices within IDSs, innovation is likely to be delayed. In addition, corporate governance is not one-size-fits-all, and contingencies are important considerations.

Variation in electronic health record adoption and readiness for meaningful use: 2008-2011.

BACKGROUND: Federal initiatives are underway that provide physicians with financial incentives for meaningful use (MU) of electronic health records (EHRs) and assistance to purchase and implement EHRs. OBJECTIVE: We sought to examine readiness and interest in MU among primary care physicians and specialists, and identify factors that may affect their readiness to obtain MU incentives. DESIGN/PARTICIPANTS: We analyzed 4 years of data (2008-2011) from the National Ambulatory Medical Care Survey (NAMCS) Electronic Medical Record (EMR) Supplement, an annual cross-sectional nationally representative survey of non-federally employed office-based physicians. MAIN MEASURES: Survey-weighted EHR adoption rates, potential to meet selected MU criteria, and self-reported intention to apply for MU incentives. We also examined the association between physician and practice characteristics and readiness for MU. KEY RESULTS: The overall sample consisted of 10,889 respondents, with weighted response rates of 62 % (2008); 74 % (2009); 66 % (2010); and 61 % (2011). Primary care physicians' adoption of EHRs with the potential to meet MU nearly doubled from 2009 to 2011 (18 % to 38 %, p<0.01), and was significantly higher than specialists (19 %) in 2011 (p<0.01). In 2011, half of physicians (52 %) expressed their intention to apply for MU incentives; this did not vary by specialty. Multivariate analyses report that EHR adoption was significantly higher in both 2010 and 2011 compared to 2009, and primary care physicians and physicians working in larger or multi-specialty practices or for HMOs were more likely to adopt EHRs with the potential to meet MU. CONCLUSIONS: Physician EHR adoption rates increased in advance of MU incentive payments. Although interest in MU incentives did not vary by specialty, primary care physicians had significantly higher rates of adopting EHRs with the potential to meet MU. Addressing barriers to EHR adoption, which may vary by specialty, will be important to enhancing coordination of care.

Commercial importation of prescription drugs in the United States: short-run implications.

The option of legalizing the commercial importation of prescription drugs is of continued policy interest as a way to reduce U.S. drug spending. Using IMS data, we estimate potential savings from commercial drug importation under assumptions about percentage of drugs likely to attract imports; potential supply from foreign countries; and share of savings passed on to payers. Our base case estimate is that $1.7 billion per year, or 0.6 percent of total drug spending, would be saved by payers; sensitivity analyses range from 0.2 to 2.5 percent under plausible assumptions and up to 17.4 percent under unrealistic assumptions about unlimited foreign supply, costless trade, and zero profits for intermediaries. Estimated savings to payers are less than the average price differentials between the United States and foreign countries because proposed legislation exempts certain drugs from importation; foreign markets are small relative to the United States; regulatory and other constraints may limit the volume of exports; trade is costly; and intermediaries will retain some savings. Although savings to U.S. payers/consumers would likely be small and have minimal impact on total U.S. health care spending, costs to other countries could be significant, due to reduced access and possibly higher prices. In the long run, reduced investment in R&D could adversely affect consumers globally.

Geographic Variation In The Consolidation Of Physicians Into Health Systems, 2016-18.

Physician consolidation into health systems increased in nearly all metropolitan statistical areas (MSAs) from 2016 to 2018. Of the 382 US MSAs, 113 had more than half of their physicians in health systems in 2018. Consolidation of physicians was most notable in the Midwest and Northeast and in small-to-midsize MSAs.

Electronic medical records and cost efficiency in hospital medical-surgical units.

This study examines the impact of electronic medical records (EMRs) on cost efficiency in hospital medical-surgical units. Using panel data on California hospitals from 1998 to 2007, we employed stochastic frontier analysis (SFA) to estimate the relationships between EMR implementation and the cost inefficiency of medical-surgical units. We categorized EMR implementation into three stages based on the level of sophistication. We also examined the effects of specific EMR systems on cost inefficiency. Our SFA models addressed potential bias from unobserved heterogeneity and heteroskedasticity. EMR Stages 1 and 2, nursing documentation, electronic medication administration records, and clinical decision support were associated with significantly higher inefficiency.

Electronic Health Record Adoption and Rates of In-hospital Adverse Events.

OBJECTIVE: Nationwide initiatives have focused on improving patient safety through greater use of health information technology. We examined the association of hospitals' electronic health record (EHR) adoption and occurrence rates of adverse events among exposed patients. METHODS: We conducted a retrospective analysis of patient discharges using data from the 2012 and 2013 Medicare Patient Safety Monitoring System. The sample included patients age 18 and older that were hospitalized for one of 3 conditions: acute cardiovascular disease, pneumonia, or conditions requiring surgery. The main outcome measures were in-hospital adverse events, including hospital-acquired infections, adverse drug events (based on selected medications), general events, and postprocedural events. Adverse event rates and patient exposure to a fully electronic EHR were determined through chart abstraction. RESULTS: Among the 45,235 patients who were at risk for 347,281 adverse events in the study sample, the occurrence rate of adverse events was 2.3%, and 13.0% of patients were exposed to a fully electronic EHR. In multivariate modeling adjusted for patient and hospital characteristics, patient exposure to a fully electronic EHR was associated with 17% to 30% lower odds of any adverse event for cardiovascular (odds ratio [OR], 0.80; 95% confidence interval [CI], 0.72-0.90), pneumonia (OR, 0.70; CI, 0.62-0.80), and surgery (OR, 0.83; CI, 0.72-0.96) patients. The associations of EHR adoption and adverse events varied by event type and by medical condition. CONCLUSIONS: Cardiovascular, pneumonia, and surgery patients exposed to a fully electronic EHR were less likely to experience in-hospital adverse events.

Can vertically integrated health systems provide greater value: The case of hospitals under the comprehensive care for joint replacement model?

OBJECTIVE: We aim to assess whether system providers perform better than nonsystem providers under an alternative payment model that incentivizes high-quality, cost-efficient care. We posit that the payment environment and the incentives it provides can affect the relative performance of vertically integrated health systems. To examine this potential influence, we compare system and nonsystem hospitals participating in Medicare's Comprehensive Care for Joint Replacement (CJR) model. DATA SOURCES: We used hospital cost and quality data from the Centers for Medicare & Medicaid Services linked to data from the Agency for Healthcare Research and Quality's Compendium of US Health Systems and hospital characteristics from secondary sources. The data include 706 hospitals in 67 metropolitan areas. STUDY DESIGN: We estimated regressions that compared system and nonsystem hospitals' 2017 cost and quality performance providing lower joint replacements among hospitals required to participate in CJR. PRINCIPAL FINDINGS: Among CJR hospitals, system hospitals that provided comprehensive services in their local market had 5.8 percent ($1612) lower episode costs (P = .01) than nonsystem hospitals. System hospitals that did not provide such services had 3.5 percent ($967) lower episode costs (P = .14). Quality differences between system hospitals and nonsystem hospitals were mostly small and statistically insignificant. CONCLUSIONS: When operating under alternative payment model incentives, vertical integration may enable hospitals to lower costs with similar quality scores.

Horizontal and Vertical Integration of Health Care Providers: A Framework for Understanding Various Provider Organizational Structures.

INTRODUCTION: Current U.S. policy and payment initiatives aim to encourage health care provider accountability for population health and higher value care, resulting in efforts to integrate providers along the continuum. Providers work together through diverse organizational structures, yet evidence is limited regarding how to best organize the delivery system to achieve higher value care. METHODS: In 2016, we conducted a narrative review of 10 years of literature to identify definitional components of key organizational structures in the United States. A clear accounting of common organizational structures is foundational for understanding the system attributes that are associated with higher value care. RESULTS: We distinguish between structures characterized by the horizontal integration of providers delivering similar services and the vertical integration of providers fulfilling different functions along the care continuum. We characterize these structures in terms of their origins, included providers and services, care management functions, and governance. CONCLUSIONS AND DISCUSSION: Increasingly, U.S. policymakers seek to promote provider integration and coordination. Emerging evidence suggests that organizational structures, composition, and other characteristics influence cost and quality performance. Given current efforts to reform the U.S. delivery system, future research should seek to systematically examine the role of organizational structure in cost and quality outcomes.

Characteristics of Academic-Affiliated Health Systems.

PURPOSE: Changing market forces increasingly are leading academic medical centers (AMCs) to form or join health systems. But it is unclear how this shift is affecting the tripartite academic mission of education, research, and high-quality patient care. To explore this topic, the authors identified and characterized the types of health systems that owned or managed AMCs in the United States in 2016. METHOD: The authors identified AMCs as any general acute care hospitals that had a resident-to-bed ratio of at least 0.25 and that were affiliated with at least one MD- or DO-granting medical school. Using the Agency for Healthcare Research and Quality 2016 Compendium of U.S. Health Systems, the authors also identified academic-affiliated health systems (AHSs) as those health systems that owned or managed at least one AMC. They compared AMCs and other general acute care hospitals, AHSs and non-AHSs, and AHSs by type of medical school relationship, using health system size, hospital characteristics, undergraduate and graduate medical education characteristics, services provided, and ownership. RESULTS: Health systems owned or managed nearly all AMCs (361, 95.8%). Of the 626 health systems, 230 (36.7%) met the definition of an AHS. Compared with other health systems, AHSs included more hospitals, provided more services, and had a lower ratio of primary care doctors to specialists. Most AHSs (136, 59.1%) had a single, shared medical school relationship, whereas 38 (16.5%) had an exclusive medical school relationship and 56 (24.3%) had multiple medical school relationships. CONCLUSIONS: These findings suggest that several distinct types of relationships between AHSs and medical schools exist. The traditional vision of a medical school having an exclusive relationship with a single AHS is no longer prominent.

Health system integration with physician specialties varies across markets and system types.

OBJECTIVE: To examine system integration with physician specialties across markets and the association between local system characteristics and their patterns of physician integration. DATA SOURCES: Data come from the AHRQ Compendium of US Health Systems and IQVIA OneKey database. STUDY DESIGN: We examined the change from 2016 to 2018 in the percentage of physicians in systems, focusing on primary care and the 10 most numerous nonhospital-based specialties across the 382 metropolitan statistical areas (MSAs) in the US. We also categorized systems by ownership, mission, and payment program participation and examined how those characteristics were related to their patterns of physician integration in 2018. DATA COLLECTION/EXTRACTION METHODS: We examined local healthcare markets (MSAs) and the hospitals and physicians that are part of integrated systems that operate in these markets. We characterized markets by hospital and insurer concentration and systems by type of ownership and by whether they have an academic medical center (AMC), a 340B hospital, or accountable care organization. PRINCIPAL FINDINGS: Between 2016 and 2018, system participation increased for primary care and the 10 other physician specialties we examined. In 2018, physicians in specialties associated with lucrative hospital services were the most commonly integrated with systems including hematology-oncology (57%), cardiology (55%), and general surgery (44%); however, rates varied substantially across markets. For most specialties, high market concentration by insurers and hospital-systems was associated with lower rates of physician integration. In addition, systems with AMCs and publicly owned systems more commonly affiliated with specialties unrelated to the physicians' potential contribution to hospital revenue, and investor-owned systems demonstrated more limited physician integration. CONCLUSIONS: Variation in physician integration across markets and system characteristics reflects physician and systems' motivations. These integration strategies are associated with the financial interests of systems and other strategic goals (eg, medical education, and serving low-income populations).

Consolidation Of Providers Into Health Systems Increased Substantially, 2016-18.

Provider consolidation into vertically integrated health systems increased from 2016 to 2018. More than half of US physicians and 72 percent of hospitals were affiliated with one of 637 health systems in 2018. For-profit and church-operated systems had the largest increases in system size, driven in part by a large number of system mergers and acquisitions.

Landscape of Health Systems in the United States.

Despite the prevalence of vertical integration, data and research focused on identifying and describing health systems are sparse. Until recently, we lacked an enumeration of health systems and an understanding of how systems vary by key structural attributes. To fill this gap, the Agency for Healthcare Research and Quality developed the Compendium of U.S. Health Systems, a data resource to support research on comparative health system performance. In this article, we describe the methods used to create the Compendium and present a picture of vertical integration in the United States. We identified 626 health systems in 2016, which accounted for 70% of nonfederal general acute care hospitals. These systems varied by key structural attributes, including size, ownership, and geographic presence. The Compendium can be used to study the characteristics of the U.S. health care system and address policy issues related to provider organizations.

Meaningful use of health information technology and declines in in-hospital adverse drug events.

OBJECTIVE: Nationwide initiatives have promoted greater adoption of health information technology as a means to reduce adverse drug events (ADEs). Hospital adoption of electronic health records with Meaningful Use (MU) capabilities expected to improve medication safety has grown rapidly. However, evidence that MU capabilities are associated with declines in in-hospital ADEs is lacking. METHODS: Data came from the 2010-2013 Medicare Patient Safety Monitoring System and the 2008-2013 Healthcare Information and Management Systems Society (HIMSS) Analytics Database. Two-level random intercept logistic regression was used to estimate the association of MU capabilities and occurrence of ADEs, adjusting for patient characteristics, hospital characteristics, and year of observation. RESULTS: Rates of in-hospital ADEs declined by 19% from 2010 to 2013. Adoption of MU capabilities was associated with 11% lower odds of an ADE (95% confidence interval [CI], 0.84-0.96). Interoperability capability was associated with 19% lower odds of an ADE (95% CI, 0.67- 0.98). Adoption of MU capabilities explained 22% of the observed reduction in ADEs, or 67,000 fewer ADEs averted by MU. DISCUSSION: Concurrent with the rapid uptake of MU and interoperability, occurrence of in-hospital ADEs declined significantly from 2010 to 2013. MU capabilities and interoperability were associated with lower occurrence of ADEs, but the effects did not vary by experience with MU. About one-fifth of the decline in ADEs from 2010 to 2013 was attributable to MU capabilities. CONCLUSION: Findings support the contention that adoption of MU capabilities and interoperability spurred by the Health Information Technology for Economic and Clinical Health Act contributed in part to the recent decline in ADEs.

Leveraging Diverse Data Sources to Identify and Describe U.S. Health Care Delivery Systems.

Health care delivery systems are a growing presence in the U.S., yet research is hindered by the lack of universally agreed-upon criteria to denote formal systems. A clearer understanding of how to leverage real-world data sources to empirically identify systems is a necessary first step to such policy-relevant research. We draw from our experience in the Agency for Healthcare Research and Quality's Comparative Health System Performance (CHSP) initiative to assess available data sources to identify and describe systems, including system members (for example, hospitals and physicians) and relationships among the members (for example, hospital ownership of physician groups). We highlight five national data sources that either explicitly track system membership or detail system relationships: (1) American Hospital Association annual survey of hospitals; (2) Healthcare Relational Services Databases; (3) SK&A Healthcare Databases; (4) Provider Enrollment, Chain, and Ownership System; and (5) Internal Revenue Service 990 forms. Each data source has strengths and limitations for identifying and describing systems due to their varied content, linkages across data sources, and data collection methods. In addition, although no single national data source provides a complete picture of U.S. systems and their members, the CHSP initiative will create an early model of how such data can be combined to compensate for their individual limitations. Identifying systems in a way that can be repeated over time and linked to a host of other data sources will support analysis of how different types of organizations deliver health care and, ultimately, comparison of their performance.

Physician attitudes on ease of use of EHR functionalities related to Meaningful Use.

OBJECTIVES: To assess physician attitudes on ease of use of electronic health record (EHR) functionalities related to "Meaningful Use" (MU) and whether perceived ease of use was associated with EHR characteristics, including meeting MU criteria, technical assistance from EHR vendors or regional extension centers, and the amount of clinical staff training. STUDY DESIGN: A cross sectional analysis of the 2011 Physician Workflow study, nationally representative of US office-based physicians. METHODS: Cross-sectional data were used to examine physician attitudes on ease of use of 14 EHR functionalities related to MU, among physicians with any EHR system. RESULTS: For 11 of the 14 EHR functions examined, physicians with EHRs that met MU criteria were significantly more likely than physicians that also utilized EHR systems to report that EHR functions were easy to use. For 8 of the functions examined, physicians receiving technical assistance from a vendor or regional extension center were significantly more likely to report that the EHR function was easy to use. CONCLUSIONS: Our study of a nationally representative survey of office-based physicians found that physicians' adoption and perceived ease of use of EHR functionalities related to MU was generally high.

Prices and availability of pharmaceuticals: evidence from nine countries.

This study compares average price levels for pharmaceuticals in eight countries--Canada, Chile, France, Germany, Italy, Japan, Mexico, and the United Kingdom--relative to the United States. Our most comprehensive indexes, adjusted for U.S. manufacturer discounts, show Japan's prices to be higher than U.S. prices, and other countries' prices ranging from 6 percent to 33 percent lower than U.S. prices. The decline of the Canadian dollar and rise of the U.K. pound contribute to the finding of lower Canadian prices and higher U.K. prices in 1999 than in 1992. Our findings suggest that U.S.-foreign price differentials are roughly in line with income and smaller for drugs than for other medical services.

Adoption and use of electronic health records among federally qualified health centers grew substantially during 2010-12.

Federally qualified health centers play an important role in providing health care to underserved populations. Recent substantial federal investments in health information technology have enabled health centers to expand their use of electronic health record (EHR) systems, but factors associated with adoption are not clear. We examined 2010-12 administrative data from the Health Resources and Services Administration's Uniform Data System for more than 1,100 health centers. We found that in 2012 nine out of ten health centers had adopted a EHR system, and half had adopted EHRs with basic capabilities. Seven in ten health centers reported that their providers were receiving meaningful-use incentive payments from the Centers for Medicare and Medicaid Services (CMS). Only one-third of health centers had EHR systems that could meet CMS's stage 1 meaningful-use core requirements. Health centers that met the stage 1 requirements had more than twice the odds of receiving quality recognition, compared with centers with less than basic EHRs. Policy initiatives should focus assistance on EHR capabilities with slower uptake; connect providers with technical assistance to support implementation; and leverage the connection between meaningful use and quality recognition programs.