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Improving Physician-Hospital Integration More Challenging Than Expected

January 30, 2017

Researchers from Rice University’s Baker Institute for Public Policy recently released a paper entitled, “The Integration and De-integration of Physicians and Hospitals Over Time,” which detailed how the shift to tighter physician-hospital integration is more complex than originally anticipated, despite the growing trend of integration between physicians and hospitals.

“The Affordable Care Act (ACA) and changing economic conditions have encouraged an increase in physician-hospital integration,” Vivian Ho, PhD, director of Center for Health and Biosciences at the Baker Institute, and colleagues, wrote in the paper. “In particular, accountable care organizations (ACOs) and medical homes will continue to spur integration over the coming years. Policy experts and clinicians have described the potential of ACOs to improve health care quality and control cost growth.”

According to the researchers, current trends focus on overall integration, but it has not examined integration at the more granular level of how hospitals transition between integration forms.

For the study, researchers observed trends in physician-hospital integration at 4727 hospitals using the 2008 to 2013 American Hospital Association annual survey data. The survey data categorizes four forms of integration based on the type of contractual relationship a hospital has with physicians. Researchers examined the overall changes in the percentage of hospitals that were engaged in varying forms of physician-hospitals integration and the transitions between these integration levels by hospitals over time.

"During the time period studied, the optimal direction for hospital-physician integration wasn't clear for either hospitals or physicians," Dr Ho said in a press release. "It appears that many hospitals that chose to integrate then de-integrated by 2013."

According to the findings, between 2008 and 2013, the share of hospitals with physicians who are on salary rose from 44 to 55 percent at all of their facilities. Researchers found that looser forms of physician-hospital integration like joint contractual networks with managed care organizations, decreased in prominence. However, hospitals that made an aggregate shift toward tighter vertical integration masked the fact many hospitals also de-integrated or shifted to less tightly integrated physician-hospital relationships during this time period.

“The shift to tighter physician-hospital integration is more complex than previously expected,” Dr Ho and colleagues wrote.

The researchers posit that the results suggest that physicians may integrate into hospital systems with the notion that their way of business, such as decision-making authority and practice management styles, will not be adversely effected. They noted that transparency issues, EHR management, and human resources policies are among some of the other challenges faced by physicians who integrate into hospital systems.

However, the researchers stated that integrated care is mutually beneficial for hospitals and physicians—and highlighted the benefits associated with hospital integration, such as improved administration services and easier participation in ACO programs.

“A hospital seeking to participate as a Medicare ACO must build relationships with primary care physicians (PCP) and will have better control of hospital referrals if these PCPs are hospital employees,” Marah Short, MA, associate director of the Center for Health and Biosciences, said in a press release. “Physician groups that lack the financial and technical expertise to adopt EHRs that have increasingly become necessary to obtain higher reimbursements by public and private payers will be the likeliest source of integration in the future.”

Julie Gould (Mazurkiewicz)



Short M, Ho V, Ayse McCracken. The Integration and De-integration of Physicians and Hospitals Over Time [published January 2017]. January 30, 2017.

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