Market and organizational factors associated with hospital vertical integration into sub-acute care

The Portuguese NHS 2024 reform: transformation through vertical integration

Vertical integration models aim for the integration of services from different levels of care (e.g., primary, and secondary care) with the objective of increasing coordination and continuity of care as well as improving efficiency, quality, and access outcomes. This paper provides a view of the Portuguese National Health Service (NHS) healthcare providers' vertical integration, operationalized by the Portuguese NHS Executive Board during 2023 and 2024. This paper also aims to contribute to the discussion regarding the opportunities and constraints posed by public healthcare organizations vertical integration reforms. The Portuguese NHS operationalized the development and generalization of Local Health Units management model throughout the country. The same institutions are now responsible for both the primary care and the hospital care provided by public services in each geographic area, in an integrated manner. This 2024 reform also changed the NHS organic and organizational structures, opening paths to streamline the continuum of care. However, it will be important to ensure adequate monitoring and support, with the participation of healthcare services as well as community structures and other stakeholders, to promote an effective integration of care.

Vertical integration in healthcare: What does literature say about improvements on quality, access, efficiency, and costs containment?

INTRODUCTION

Vertical integration models involve integrating services from different levels of care (e.g., primary care, acute care, post-acute care). Therefore, one of their main objectives is to increase continuity of care, potentially improving outcomes like efficiency, quality, and access or even enabling cost containment.

OBJECTIVES

This study conducts a literature review and aims at contributing to the contentious discussion regarding the effects of vertical integration reforms in terms of efficiency, costs containment, quality, and access.

METHODS

We performed a systematic search of the literature published until February 2020. The articles respecting the conceptual framework were included in an exhaustive analysis to study the impact of vertical integration on costs, prices of care, efficiency, quality, and access.

RESULTS

A sample of 64 papers resulted from the screening process. The impact of vertical integration on costs and prices of care appears to be negative. Decreases in technical efficiency upon vertical integration are practically out of the question. Nevertheless, there is no substantial inclination to visualise a positive influence. The same happens with the quality of care. Regarding access, the lack of available articles on this outcome limits conjectures.

CONCLUSIONS

In summary, it is not clear yet whether vertically integrated healthcare providers positively impact the overall delivery care system. Nevertheless, the recent growing trend in the number of studies suggests a promising future on the analysis of this topic.

Variation of hospital-based adoption of care coordination services by community-level social determinants of health

BACKGROUND

Hospital investments in care coordination services and innovative delivery models represent an important source for improving care efficiency and population health.

OBJECTIVE

The aim of this study was to explore variation of hospital-initiated care coordination services and participation in Accountable Care Organizations (ACOs) by community characteristics within an organizational theory framework.

METHODS

Our main data sets included the 2015 American Hospital Association Annual Survey, Survey of Care Systems and Payment, American Community Survey, and Area Health Resource File. Two main outcomes were (a) hospital-reported initiation of care coordination practices (such as chronic disease management, post-hospital discharge continuity of care, and predictive analytics) and (b) participation in ACO models. State fixed-effects models were used to test the association between the adoption of care coordination practices and hospital characteristics, community-level sociodemographic characteristics, and health policies.

RESULTS

Hospitals with large bed size, located in urban areas, and/or with high volume of operations were more likely to adopt care coordination practices and participate in the ACO models. Hospitals serving communities with high uninsurance rates and/or poverty rates were significantly less likely to provide care coordination practices. More stringent Community Benefit Laws (CBLs) were positively associated with the implementation of care coordination practices suggesting strong normative impacts of CBLs.

CONCLUSION

Greater hospital-initiated care coordination practices and innovative ACO models were available in well-resourced areas. Policymakers may consider increasing resources for care coordination practices in rural, underserved, and high-poverty-high-uninsured areas to ensure that vulnerable populations can benefit from these services.

Vertical Integration Into Skilled Nursing Facilities and Hospital Readmission Rates

Following the Affordable Care Act (ACA), more hospitals vertically integrated into skilled nursing facilities (SNFs). Hospitals are now being penalized for avoidable readmissions, creating a greater demand for better coordination of care between hospitals and SNF. We created a longitudinal panel data set by merging data from the American Hospital Association's Annual Survey, CMS' Hospital Compare, and the Rural Urban Commuting Area data. Hospital and year fixed-effects models were used to examine the relationship between hospital vertical integration into SNF and 30-day pneumonia and heart failure (HF) readmission rates between 2008 and 2011. Our primary analyses modeled the impact of hospital vertical integration into SNF on 30-day readmissions for both pneumonia and HF using hospital and year fixed effects. Our secondary analyses examined whether hospital vertical integration into SNF was associated with a change in readmissions rates among different types of hospitals. Our results indicate that hospitals that vertically integrated into SNF were associated with a reduction in hospital 30-day pneumonia readmission rates (β = -0.233, p = .039). Vertical integration into SNF was not significantly associated with 30-day HF readmissions. Our secondary analyses found variation in the impact of vertical integration on readmission rates among different hospital organizational types.

Hospital Vertical Integration Into Subacute Care as a Strategic Response to Value-Based Payment Incentives, Market Factors, and Organizational Factors: A Multiple-Case Study

This study explores the extent to which payment reform and other factors have motivated hospitals to adopt a vertical integration strategy. Using a multiple-case study research design, we completed case studies of 3 US health systems to provide an in-depth perspective into hospital adoption of subacute care vertical integration strategies across multiple types of hospitals and in different health care markets. Three major themes associated with hospital adoption of vertical integration strategies were identified: value-based payment incentives, market factors, and organizational factors. We found evidence that variation in hospital adoption of vertical integration into subacute care strategies occurs in the United States and gained a perspective on the intricacies of how and why hospitals adopt a vertical integration into subacute care strategy.