Managed care and processes to integrate physicians/hospitals

The effects of hospital-physician financial integration on adverse incident rate: An agency theory perspective

BACKGROUND

Patient safety is an important aspect of quality of care. Physicians' alignment with hospitals by means of financial integration may possibly help hospitals achieve their quality goals. Most research examines the effects of financial integration on financial performance. There is a need to understand whether financial integration has an effect on quality and safety.

PURPOSE

The aim of this study is to examine the association between hospital physician financial integration (employment, joint ventures, and ownership) and Adverse Incident Rate.Methodology: A longitudinal panel study design was used. A random effects model with hospital, year, and state effects was used. Our sample contained 3,528 hospitals observations within U.S. from 2013-2015.

FINDINGS

Contrary to our hypotheses, hospital physician financial integration does not influence AIR. Besides financial integration, hospitals need to have a high commitment towards quality and safety to influence a lower AIR.

Two Decades of Organizational Change in Health Care: What Have we Learned?

The 1980s and 1990s witnessed a substantial wave of organizational restructuring among hospitals and physicians, as health providers rethought their organizational roles given perceived market imperatives. Mergers, acquisitions, internal restructuring, and new interorganizational relationships occurred at a record pace. Matching this was a large wave of study and discourse among health services researchers, industry experts, and consultants to understand the causes and consequences of organizational change. In many cases, this literature provides mixed signals about what was accomplished through these organizational efforts. The purpose of this review is to synthesize this diverse literature. This review examines studies of horizontal consolidation and integration of hospitals, horizontal consolidation and integration of physician organizations, and integration and relationship development between physicians and hospitals. In all, around 100 studies were examined to assess what was learned through two decades of research on organizational change in health care.

Review: how do hospital organizational structure and processes affect quality of care?: a critical review of research methods

Interest in organizational contributions to the delivery of care has risen significantly in recent years. A challenge facing researchers, practitioners, and policy makers is identifying ways to improve care by improving the organizations that provide this care, given the complexity of health care organizations and the role organizations play in influencing systems of care. This article reviews the literature on the relationship between the structural characteristics and organizational processes of hospitals and quality of care. The review uses Donabedian's structure-process-outcome and level of analysis frameworks to organize the literature. The results of this review indicate that a preponderance of studies are conducted at the hospital level of analysis and are predominantly focused on the organizational structure-quality outcome relationship. The article concludes with recommendations of how health services researchers can expand their research to enhance one's understanding of the relationship between organizational characteristics and quality of care.

Growth Of Single-Specialty Medical Groups

Using site-visit data from the Community Tracking Study, we show that specialists are increasingly forming large single-specialty medical groups, particularly in orthopedics and cardiology, where new technologies have increased the number of diagnostic imaging and surgical services that can be provided in outpatient settings. Specialists are also forming large groups to gain negotiating leverage with health plans; the decline of managed care and the fading of the perception of a specialist surplus has made single- rather than multispecialty groups an attractive means to gain leverage. We explore possible consequences of this shift in physician practice organization and its policy implications.

The Effects of Organization on Medical Utilization: An Analysis of Service Line Organization

OBJECTIVES

To determine whether clinical service lines in primary care and mental health reduces inpatient and urgent care utilization.

METHODS

All VHA medical centers were surveyed to determine whether service lines had been established in primary care or mental health care prior to the beginning of fiscal year 1997 (FY97). Facility-level data on medical utilization from Veterans Health Affairs (VHA) administrative databases were used for descriptive and multivariate regression analyses of utilization and of changes in measures between FY97 and FY98. Nine primary care-related and 5 mental health-related variables were analyzed.

PRINCIPAL FINDINGS

Primary care and mental health service lines had been established in approximately half of all facilities. Service lines varied in duration and extent of restructuring. Mere presence of a service line had no positive and several negative effects on measured outcome variables. More detailed analyses showed that some types of service lines have statistically significant and mostly negative effects on both mental health and primary care-related measures. Newly implemented service lines had significantly less improvement in measures over time than facilities with no service line.

CONCLUSIONS

Health care organizations are implementing innovative organizational structures in hopes of improving quality of care and reducing resource utilization. We found that service lines in primary care and mental health may lead to an initial period of disruption, with little evidence of a beneficial effect on performance for longer duration service lines.

The determinants of hospital and HMO vertically integrated delivery systems in a competitive health care sector

As a response to increased competition in the U.S. health care system, there have been a number of structural changes such as substantial increases in the number of hospital closings, horizontal mergers, and vertical combinations. This paper uses logistic regression and ordinary least squares models to attempt to understand why short-term, non-federal hospitals have created vertically integrated systems with HMOs in urban and rural markets during the 1993-1997 period. During this period, 1,917 integrated systems were formed while 1,466 dissolved. The empirical results indicate that the relative buying power of hospitals is a significant determinant of why hospitals would create vertically integrated systems with HMOs. Other variables also have significant effects upon the creation of vertical affiliations both at the individual hospital level and at the market level.

Something old, something new: recent developments in hospital-physician relationships

OBJECTIVE

To describe recent developments in hospital-physician relationships in 12 metropolitan areas.

METHODS

We analyze qualitative data from a third round of biannual site visit interviews conducted in 12 randomly selected metropolitan areas from 1996 to 2001. The study interviewed 895 respondents during the third round of site visits, conducted in 2000 and 2001.

PRINCIPAL FINDINGS

As HMO enrollment and capitation contracting has failed to grow in local markets, hospital executives have returned to a strategic focus on improving relationships with specialists in pursuit of fee-for-service revenue. Yet, 65 percent of hospitals interviewed in 2000 and 2001 continued to own primary care physician practices, with ownership more prevalent in highly concentrated hospital markets. A majority (55 percent) of hospitals have decreased the size of these practices in the past two years.

CONCLUSIONS

Interest in forming integrated delivery systems has waned. The potential for quality improvement through these organizations systems--by emphasizing primary care and coordinating hospital and physician services--has not been realized. The new emphasis on hospital-specialist partnerships may improve the financial status of hospitals and participating specialists in local markets, and may improve quality of care in selected service areas, but it may also increase health care costs incurred by employers and consumers.

Financial risk sharing with providers in health maintenance organizations, 1999

The transfer of financial risk from health maintenance organizations (HMOs) to providers is controversial. To provide timely national data on these practices, we conducted a telephone survey in 1999 of a multi-staged probability sample of HMOs in 20 of the nation's 60 largest markets, accounting for 86% of all HMO enrollees nationally. Among those sampled, 82% responded. We found that HMOs' provider networks with physicians, hospitals, skilled nursing homes, and home health agencies are complex and multi-tiered Seventy-six percent of HMOs in our study use contracts for their HMO products that involve global, professional services, or hospital risk capitation to intermediate entities. These arrangements account for between 24.5 million and 27.4 million of the 55.9 million commercial and Medicare HMO enrollees in the 60 largest markets. While capitation arrangements are particularly common in California, they are more common elsewhere than many assume. The complex layering of risk sharing and delegation of care management responsibility raise questions about accountability and administrative costs in managed care. Do complex structures provide a way to involve providers more directly in managed care, or do they diffuse authority and add to administrative costs?

CEO perceptions of competition--and strategic response in hospital markets

Physician-organization integration (POI) has emerged as a key issue for hospitals and health systems seeking to improve the quality and cost-effectiveness of care. Although competition and managed care are often cited as primary market drivers of the adoption of POI strategies, prior research has shown only weak associations between these market attributes and POI. This article argues that the role of key organizational decision makers has not been adequately accounted for in explaining strategic change. The study examines the role of hospital CEO perceptions of competition in predicting the adoption of five different approaches to POI. CEO perceptions of general market competition are explained by a combination of market and organizational attributes. Furthermore, when controlling for objective characteristics of the environment and organization, CEO perceptions of competition have consistent, statistically significant associations with four of five measures of POI examined.

Just how integrated are integrated delivery systems? Results from a national survey

This article examines three emergent processes in physician-hospital integrated delivery systems (IDSs). We find these processes are underdeveloped based on data gathered from a national sample of hospitals drawn from nine health care systems. These processes are also loosely coupled with the structures used to integrate physicians and hospitals, as well as with the environmental context in which they occur. Such loose coupling entails both advantages and disadvantages for IDSs.

The effects of structure, strategy and market conditions on the operating practices of physician-organization arrangements

Research to date has documented weak or inconsistent associations between market and organizational factors and the adoption of physician-organization arrangements (POAs) (e.g. physician-hospital organizations, management service organizations and independent practice associations) designed to increase physician integration. We argue that POAs may mask considerable variation in how these entities are operated and governed. Further, because the operating policies and practices of POAs are likely to influence more directly the behaviour of physicians than the structural form of the POA, they may be more sensitive to the market and organizational contingencies that encourage integration. This study attempts to test empirically the relative effects of POA type and market, strategic and organization factors on the operating policies and practices of market-based POAs. Results suggest that type of POA, and market, strategic and organizational factors affect risk sharing, physician selection practices, physician monitoring practices and ways in which monitoring information is used to influence physician behaviour in POAs.

Physician and clinical integration among rural hospitals

The pressures for closer alignment between physicians and hospitals in both rural and urban areas are increasing. This study empirically specifies independent dimensions of physician and clinical integration and compares the extent to which such activities are practiced between rural and urban hospitals and among rural hospitals in different organizational and market contexts. Results suggest that both rural and urban hospitals practice physician integration, although each emphasizes different types of strategies. Second, urban hospitals engage in clinical integration with greater frequency than their rural counterparts. Finally, physician integration approaches in rural hospitals are more common among larger rural hospitals, those proximate to urban facilities, those with system affiliations, and those not under public control.