Is the system really the solution? Operating costs in hospital systems

Equity Investment in Physician Practices: What's All This Brouhaha?

There have been two waves of equity-based investment in physician practices. Both used a combination of public and private sources but in different mixes. The first investment wave, in the 1990s, was led by public equity and physician practice management companies, with less involvement by private equity (PE). The second investment wave followed the Affordable Care Act and was led by PE firms. It has generated concerns of wasteful spending, less cost-effective care, and initiatives harmful to patient welfare. This article compares the two waves and asks if they are parallel in important ways. It describes the similarities in the players, driving forces, acquisition dynamics, spurs to consolidation, types of equity involved, models to organize physicians, and levels of market penetration achieved. The article then tackles three unresolved issues: Does PE investment differ from other investment vehicles in concerning ways? Does PE possess capabilities that other investment vehicles lack and confer competitive advantage? Does physician practice investment offer opportunities for supernormal profits? It then discusses ongoing trends that may disrupt PE and curtail its practice investment. It concludes that past may be prologue, that is, what happened during the 1990s may well repeat, suggesting the PE threat is overblown.

Association between characteristics of employing healthcare facilities and healthcare worker infection rates and psychosocial experiences during the COVID-19 pandemic

BACKGROUND

Healthcare facility characteristics, such as ownership, size, and location, have been associated with patient outcomes. However, it is not known whether the outcomes of healthcare workers are associated with the characteristics of their employing healthcare facilities, particularly during the COVID-19 pandemic.

METHODS

This was an analysis of a nationwide registry of healthcare workers (the Healthcare Worker Exposure Response and Outcomes (HERO) registry). Participants were surveyed on their personal, employment, and medical characteristics, as well as our primary study outcomes of COVID-19 infection, access to personal protective equipment, and burnout. Participants from healthcare sites with at least ten respondents were included, and these sites were linked to American Hospital Association data to extract information about sites, including number of beds, teaching status, urban/rural location, and for-profit status. Generalized estimating equations were used to estimate linear regression models for the unadjusted and adjusted associations between healthcare facility characteristics and outcomes.

RESULTS

A total of 8,941 healthcare workers from 97 clinical sites were included in the study. After adjustment for participant demographics, healthcare role, and medical comorbidities, facility for-profit status was associated with greater odds of COVID-19 diagnosis (aOR 1.76, 95% CI 1.02-3.03, p = .042). Micropolitan location was associated with decreased odds of COVID-19 infection after adjustment (aOR = 0.42, 95% CI 0.24, 0.71, p = .002. For-profit facility status was associated with decreased odds of burnout after adjustment (aOR = 0.53, 95% CI 0.29-0.98), p = .044).

CONCLUSIONS

For-profit status of employing healthcare facilities was associated with greater odds of COVID-19 diagnosis but decreased odds of burnout after adjustment for demographics, healthcare role, and medical comorbidities. Future research to understand the relationship between facility ownership status and healthcare outcomes is needed to promote wellbeing in the healthcare workforce.

TRIAL REGISTRATION

The registry was prospectively registered: ClinicalTrials.gov Identifier (trial registration number) NCT04342806, submitted April 8, 2020.

Consolidation trends in vascular surgery

BACKGROUND

Practice consolidation by vertical and horizontal integration is a growing trend in surgery. Practice consolidation has not been previously examined in vascular surgery.

METHODS

The Medicare Provider Enrollment, Chain, and Ownership System data were used to identify vascular providers and vascular surgery practices in the United States in 2015 and 2020. Practices were categorized as solo (1 surgeon), small (2), medium (3-5), and large (≥6). The number of providers and the number of practices in each size group were determined. The Hirfendahl-Hirshman index (HHI), a measure of market consolidation, was calculated. Provider count, practice size, and HHI were additionally analyzed by urban and rural regions. All values were calculated for each time point and compared.

RESULTS

Vascular providers increased in number from 2929 to 3154 (7.7%) from 2015 to 2020. The number of practices decreased from 1351 to 1090 (19.3%). The number of large practices increased by 49.4%; the number of small or solo practices decreased by 42.1%. The mean HHI increased from 0.486 in 2015 to 0.498 in 2020. Both urban and rural regions had a decrease in solo practices (43.3% and 2.3%, respectively) and an increase in HHI (from 0.499 to 0.509 and 0.793 to 0.818, respectively). All changes were statistically significant.

CONCLUSIONS

From 2015 to 2020, there is a trend toward vascular providers working in larger practice groups and a corresponding increase in measures of market consolidation.

Time to Transfer as a Quality Improvement Imperative: Implications of a Hub-and-Spoke Health System Model on the Timing of Emergency Procedures

BACKGROUND

In the increasingly prevalent hub-and-spoke health system model, specialized services are centralized at a hub hospital, while spoke hospitals offer more limited services and transfer patients to the hub as needed. In one urban, academic health system, a community hospital without procedural capabilities was recently incorporated as a spoke. The goal of this study was to assess the timeliness of emergent procedures for patients presenting to the spoke hospital under this model.

METHODS

The authors performed a retrospective cohort study of patients transferred from the spoke hospital to the hub hospital for emergency procedures after the health system restructuring (April 2021-October 2022). The primary outcome was the proportion of patients who arrived within their goal transfer time. Secondary outcomes were time from transfer request to procedure start and whether procedure start occurred within guideline-recommended treatment time frames for ST-elevation myocardial infarction (STEMI), necrotizing soft tissue infection (NSTI), and acute limb ischemia (ALI).

RESULTS

A total of 335 patients were transferred for emergency procedural intervention during the study period, most commonly for interventional cardiology (23.9%), endoscopy or colonoscopy (11.0%), or bone or soft tissue debridement (10.7%). Overall, 65.7% of patients were transferred within the goal time. 23.5% of patients with STEMI met goal door-to-balloon time, and more patients with NSTI (55.6%) and ALI (100%) underwent intervention within the guideline-recommended time frame.

CONCLUSION

A hub-and-spoke health system model can provide access to specialized procedures in a high-volume, resource-rich setting. However, ongoing performance improvement is required to ensure that patients with emergency conditions receive timely intervention.

Big Med's Spread

Policy Points Hospital executives posit a number of rationales for system mergers which lack any basis in academic evidence. Decades of academic research question whether system combinations confer public benefits. Antitrust authorities need to continue to closely scrutinize these transactions. Recently, mergers of hospital systems that span different geographic markets are on the rise. Economists have alerted policymakers about the potential impacts such cross-market mergers may have on hospital prices. We suggest there are other reasons for concern that scholars have not often confonted. Cross-market mergers may be conducted for purely self-serving reasons of organizational growth that increases executive compensation. Combinations of sellers should have clear advantages to consumers. System executives and their boards should bear the burden of proof. Federal regulators and state attorney generals should be cognizant that rationales for cross-market systems advanced by merging parties are unlikely to be operative or dominant in merger decision making. Policymakers should be careful about passing legislation that encourages hospitals to consolidate.

CONTEXT

There is a growing trend of combinations among hospital systems that operate in different geographic markets known as cross-market mergers. Economists have analyzed these broader systems in terms of their anticompetitive behavior and pricing power over insurers. This paper evaluates the benefits advanced by these new hospital systems that speak to a different set of issues not usually studied: increased efficiencies, new capabilities, operating synergies, and addressing health inequities. The paper thus "looks under the hood" of these emerging, cross-market systems to assess what value they might bestow and upon whom.

METHODS

The paper examines recently announced cross-market mergers in terms of their supposed benefits, as expressed by the systems' executives as well as by industry consultants. These presumed benefits are then evaluated against existing evidence regarding hospital system outcomes.

FINDINGS

Advocates of cross-market hospital mergers cite a host of benefits. Research suggests these benefits are nonexistent. Additional evidence suggests other motives may be at play in the formation of cross-market mergers that have nothing to do with efficiencies, synergies, or community benefits. Instead these mergers may be self-serving efforts by system chief executive officers (CEOs) to boost their compensation.

CONCLUSIONS

Cross-market hospital mergers may yield no benefits to the hospitals involved or the communities in which they operate. The boards of hospital systems that engage in these cross-market mergers need to exercise greater diligence over the actions of their CEOs.

Assessing the Impact of Interorganizational Linkages on Medical Home Model Adoption by U.S. Acute Care Hospitals

The medical home model aims to increase care coordination and health care quality. While the adoption of the model has been increasing, the role of U.S. acute care hospitals' interorganizational linkages on adoption is yet to be explored. Using a national sample of hospitals throughout the United States, we examined what interorganizational linkage features are associated with medical home adoption of hospital-owned physician practices and assess the pattern of adoption by acute care hospitals between 2011 and 2019. A generalized estimating equation with binomial distribution was utilized to assess the association between interorganizational linkages and medical home adoption. Hospitals with structural linkages and institutional linkages were more likely to have adopted the medical home. Moreover, the likelihood of medical home adoption increased relative to an increasing number of interorganizational linkages. Medical home adoption and dissemination efforts may be more effective when focused on hospitals possessing interorganizational linkages, specifically those with structural linkages.

Understanding the relationship between nonprofit hospital community benefit spending and system membership: An analysis of independent hospital acquisitions

The Internal Revenue Service (IRS) requires nonprofit hospitals to report community benefit spending to justify their nonprofit tax exemption. We examined whether nonprofit hospital acquisitions influence the amount and type community benefit spending. We analyzed 2011-2018 data on urban, nonprofit hospitals. The analysis dataset included 57 hospitals that were acquired and a matched control group. We estimated difference-in-differences specifications to measure the effect of acquisitions on total community benefit spending, and three subcategories - clinical, population health, and other spending types. We found that acquisitions led to decreased population health spending (-$0.32 million, p < 0.01) and other spending categories (-$1.5 million, p < 0.05), but no significant change in total or clinical spending. If the acquirer was located out-of-state, total community benefit spending declined by $2.4 million (p < 0.10). Our findings support the need for community benefit spending to be considered, along with quality, efficiency, and prices, when evaluating the welfare impact of acquisitions.

Resilience in healthcare supply chains: a review of the UK’s response to the COVID19 pandemic

Purpose

The purpose of this explorative research is to analyse the resilience of the United Kingdom's (UK) healthcare supply chains from a customer’s perspective in the light of the coronavirus pandemic.

Design/methodology/approach

Using the capabilities of preparedness, robustness, recovery and adaptability as the foundational percept for supply chain resilience, 22 healthcare professionals in 17 of the UK's National Health Scheme (NHS) Trusts were interviewed to explore their personal and organisational approaches adopted relative to the provision of eye protection, gloves, gowns, aprons, masks and respirators. The Dynamic Capabilities View is mapped to the resilience capabilities and used to analyse the data from a transformational supply chain research perspective.

Findings

The supply chains were largely unprepared, which was not particularly surprising even though the availability of gloves was significantly better compared to the other personal protective equipment (PPE). Techniques adopted to ensure robustness and recovery revealed the use of unsanctioned methods such as extended use of PPE beyond recommended use, redefinition of guidelines, protocols and procedures by infection control and the use of expired PPE – all of which compromised customer well-being.

Research limitations/implications

As the paper views resilience through the lens of customers, it does not provide the perspectives of the supply chain practitioners as to the reasons for the findings and the challenges within these supply chains.

Practical implications

The compromise of the well-being of healthcare workers due to the vulnerabilities of healthcare supply chains is highlighted to managers and prescriptions for post-disruption adaptability are made.

Originality/value

This paper introduces transformative research to supply chain resilience research by uniquely looking at resilience from the customers' well-being perspective.

Cost analysis of supply chain management of Da Vinci surgical instruments: A retrospective study

BACKGROUND: Da Vinci surgery is used extensively, but the high costs of the surgical instrument are a serious clinical and management problem. OBJECTIVE: To reduce the cost of the Da Vinci robotic surgical instrument supply chain. METHODS: Patients were selected from the First Affiliated Hospital of Sun Yat-sen University, Guangzhou, China. Control group patients underwent Da Vinci robot-assisted surgery between January 2019 and June 2019 (control group). Patients who were operated with the same robot from July 2019 to December 2019 were selected as the experimental group (SCM group). The cost analysis and comparison were carried out to integrate instrument sets, working hours, workforce expenditure, and direct and indirect expenses. RESULTS: Compared with the control group, the number of instrument packages was lower (4.5 ± 1.4 vs. 11.5 ± 1.6, P< 0.001) and the personnel’s awareness of the instruments was higher (92.3 ± 4.2 vs. 83.4 ± 3.7, P< 0.001) in the SCM group. The SCM group showed lower processing time per device (8.1 ± 1.6 vs. 44.2 ± 5.6 min, P< 0.001) and lower costs per surgical instrument (RMB 11.5 ± 2.3 vs. 60.3 ± 10.2, P< 0.001). CONCLUSION: The application of the supply chain management can reduce the costs of robotic surgery, improve work efficiency and decrease the failure rate of instruments.

Does healthcare system device volume correlate with price paid for spinal implants: a cross-sectional analysis of a national purchasing database

OBJECTIVES

Amid continuously rising US healthcare costs, particularly for inpatient and surgical services, strategies to more effectively manage supply chain expenses are urgently necessary. Across industries, the 'economy of scale' principle indicates that larger purchasing volumes should correspond to lower prices due to 'bulk discounts'. Even as such advantages of scale have driven health system mergers in the USA, it is not clear whether they are being achieved, including for specialised products like surgical implants which may be more vulnerable to cost inefficiency. The objective of this observational cross-sectional study was to investigate whether purchasing volumes for spinal implants was correlated with price paid.

SETTING

USA.

PARTICIPANTS

Market data based on pricing levels for spine implants were reviewed from industry implant price databases. Filters were applied to narrow the sample to include comparable institutions based on procedural volume, patient characteristics and geographical considerations. Information on the attributes of 619 health systems representing 12 471 provider locations was derived from national databases and analytics platforms.

PRIMARY OUTCOME MEASURE

Institution-specific price index paid for spinal implants, normalised to the national average price point achieved.

RESULTS

A Spearman's correlation test indicated a weak relationship between purchasing volume and price index paid (ρ=-0.35, p<0.001). Multivariable linear regression adjusting for institutional characteristics including type of hospital, accountable care organisation status, payer-mix, geography, number of staffed beds, number of affiliated physicians and volume of patient throughput also did not exhibit a statistically significant relationship between purchasing volume and price index performance (p=0.085).

CONCLUSIONS

National supply chain data revealed that there was no significant relationship between purchasing volume and price paid by health systems for spinal implants. These findings suggest that factors other than purchasing or patient volume are responsible for setting prices paid by health systems to surgical vendors and/or larger healthcare systems are not negotiating in a way to consistently achieve optimal pricing.

Urology Workforce Changes and Implications for Prostate Cancer Care Among Medicare Enrollees

OBJECTIVE

To characterize national trends in urologist workforce, practice organization, and management of incident prostate cancer.

METHODS

Using Medicare claims data from 2010 to 2016, we identified all urologists billing Medicare and the practice with which they were affiliated. We characterized groups as solo, small single specialty, large single specialty, multispecialty, specialist, or hospital-owned practices. Using a 20% sample of national Medicare claims, we identified all patients with incident prostate cancer and identified their primary treatment.

RESULTS

The number of urologists increased from 9,305 in 2010 to 9,570 in 2016 (P = .03), while the number of practices decreased from 3,588 to 2,861 (P < .001). The proportion of urologists in multispecialty groups increased from 17.1% in 2010 to 28.2% in 2016, while those within solo practices declined from 26.2% to only 15.8% over the same time period. A higher proportion of patients at hospital-owned practices were treated with observation (P < .001) and surgery (P < .001), while a higher proportion of patients at large single specialty practices were treated with radiation therapy (P < .001).

CONCLUSION

We characterized shifts in urologist membership from smaller, independent groups to larger, multispecialty or hospital-owned practices. This trend coincides with higher utilization of observation and surgical treatment for prostate cancer.

Hospital-based health systems 20 years later: A taxonomy for policy research and analysis

OBJECTIVE

Building on the original taxonomy of hospital-based health systems from 20 years ago, we develop a new taxonomy to inform emerging public policy and practice developments.

DATA SOURCES

The 2016 American Hospital Association's (AHA) Annual Survey; the 2016 IQVIA Healthcare Organizations and Systems (HCOS) database; and the 2017-2018 National Survey of Healthcare Organizations and Systems (NSHOS).

STUDY DESIGN

Cluster analysis of the 2016 AHA Annual Survey data to derive measures of differentiation, centralization, and integration to create categories or types of hospital-based health systems.

DATA COLLECTION

Principal components factor analysis with varimax rotation generating the factors used in the cluster algorithms.

PRINCIPAL FINDINGS

Among the four cluster types, 54% (N = 202) of systems are decentralized (-0.35) and relatively less differentiated (-0.37); 23% of systems (N = 85) are highly differentiated (1.28) but relatively decentralized (-0.29); 15% (N = 57) are highly centralized (2.04) and highly differentiated (0.65); and approximately 9 percent (N = 33) are least differentiated (-1.35) and most decentralized (-0.64). Despite differences in calculation, the Highly Centralized, Highly Differentiated System Cluster and the Undifferentiated, Decentralized System Cluster were similar to those identified 20 years ago. The other two system clusters contained similarities as well as differences from those 20 years ago. Overall, 82 percent of the systems remain relatively decentralized suggesting they operate largely as holding companies allowing autonomy to individual hospitals operating within the system.

CONCLUSIONS

The new taxonomy of hospital-based health systems bears similarities as well as differences from 20 years ago. Important applications of the taxonomy for addressing current challenges facing the healthcare system, such as the transition to value-based payment models, continued consolidation, and the growing importance of the social determinants of health, are highlighted.

Magnet hospital recognition in hospital systems over time

BACKGROUND

Magnet hospitals are recognized for nursing excellence and high-value patient outcomes, yet little is known about which and when hospitals pursue Magnet recognition. Concurrently, hospital systems are becoming a more prominent feature of the U.S. health care landscape.

PURPOSE

The aim of the study was to examine Magnet adoption among hospital systems over time.

APPROACH

Using American Hospital Association surveys (1998-2012), we characterized the proportion of Magnet hospitals belonging to systems. We used hospital level fixed-effects regressions to capture changes in a given system hospital's Magnet status over time in relation to a variety of conditions, including prior Magnet adoption by system affiliates and nonaffiliates in local and geographically distant markets and whether these relationships varied by degree of system centralization.

RESULTS

The proportion of Magnet hospitals belonging to a system is increasing. Prior Magnet adoption by a hospital within the local market was associated with an increased likelihood of a given system hospital becoming Magnet, but the effect was larger if there was prior adoption by affiliates (7.4% higher likelihood) versus nonaffiliates (2.7% higher likelihood). Prior adoption by affiliates and nonaffiliates in geographically distant markets had a lesser effect. Hospitals belonging to centralized systems were more reactive to Magnet adoption of nonaffiliate hospitals as compared with those in decentralized systems.

CONCLUSIONS

Hospital systems take an organizational perspective toward Magnet adoption, whereby more system affiliates achieve Magnet recognition over time.

PRACTICE IMPLICATIONS

The findings are relevant to health care and nursing administrators and policymakers interested in the diffusion of an empirically supported organizational innovation associated with quality outcomes, particularly in a time of increasing hospital consolidation and system expansion. We identify factors associated with Magnet adoption across system hospitals and demonstrate the importance of considering diffusion of organizational innovations in relation to system centralization. We suggest that decentralized system hospitals may be missing potential benefits of such organizational innovations.

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.

Association of Organizational Factors and Physician Practices' Participation in Alternative Payment Models

Importance

Consolidation among physician practices and between hospitals and physician practices has accelerated in the past decade, resulting in higher prices in commercial markets. The resulting integration of health care across clinicians and participation in alternative payment models (APMs), which aim to improve quality while constraining spending, are cited as reasons for consolidation, but little is known about the association between integration and APM participation.

Objective

To examine the association of organizational characteristics, ownership, and integration with intensity of participation in APMs among physician practices.

Design, Setting, and Participants

A cross-sectional descriptive study, adjusted for sampling and nonresponse weights, was conducted in US physician practice respondents to the National Survey of Healthcare Organizations and Systems conducted between June 16, 2017, and August 17, 2018; of 2333 responses received (response rate, 46.9%) and after exclusion of ineligible and incomplete responses, the number of practices included in the analysis was 2061. Data analysis was performed from April 1, 2019, to August 31, 2019.

Exposures

Self-reported physician practice characteristics, including ownership, integration (clinical, cultural, financial, and functional), care delivery capabilities, activities, and environmental factors.

Main Outcomes and Measures

Participation in APMs: (1) bundled payments, (2) comprehensive primary care and medical home programs, (3) pay-for-performance programs, (4) capitated contracts with commercial health plans, and (5) accountable care organization contracts.

Results

A total of 49.2% of the 2061 practices included reported participating in 3 or more APMs; most participated in pay-for-performance and accountable care organization models. Covariate-adjusted analyses suggested that operating within a health care system (odds ratio [OR] for medical group: 2.35; 95% CI, 1.70-3.25; P < .001; simple health system: 1.46; 95% CI, 1.08-1.97; P = .02; and complex health system: 1.76; 95% CI, 1.25-2.47; P = .001 relative to independent practices), greater clinical (OR, 4.68; 95% CI, 2.28-9.59; P < .001) and functional (OR, 4.24; 95% CI, 2.00-8.97; P < .001) integration, and being located in the Northeast (OR for Midwest: 0.47; 95% CI, 0.34-0.65; P < .001; South: 0.47; 95% CI, 0.34-0.66; P < .001; and West: 0.64; 95% CI, 0.46-0.91; P = .01) were associated with greater APM participation.

Conclusions and Relevance

Greater APM participation appears to be supported by integration and system ownership.

Of barriers and bridges: Buyer-supplier relationships in health care

BACKGROUND

As the second largest expense category after labor, supply expense has received more strategic attention in recent years. Collaborative buyer-supplier relationships play a significant role in strategic supply chain management. In the health sector, however, buyer-supplier relationships are generally perceived as adversarial and distrusting.

PURPOSE

The aim of this study was to investigate the major buyer-supplier relationship barriers, with an emphasis on the role of the physician as a surrogate buyer in the hospital's procurement process.

METHODOLOGY

Semistructured interviews were conducted with informants from six health systems and five medical device manufacturers in the United States. Additional data were gathered through a focus group consisting of 10 senior-level physicians. A structured qualitative analysis identified important themes in buyer-supplier relationship factors.

RESULTS

From the data, four major themes emerged regarding the barriers to collaborative buyer-supplier relationships: lack of information sharing, opportunistic pricing behavior, changing regulations, and physician-supplier alliances. Further investigation regarding the role of the physician in purchasing reveals triadic implications.

CONCLUSIONS

The medical device market continues to exhibit strained buyer-supplier relationships. The physician's professional role in supply selection can undermine the hospital's strategic supply management efforts.

PRACTICE IMPLICATIONS

Both buyers and suppliers need to exhibit more information transparency in order to develop collaborative relationships with at least a small number of strategic partners. Supply chain executives at hospitals need to play a more active role in facilitating the link between the hospital's physicians and suppliers. Alternatively, hospitals can provide physicians with substitute services to curb supplier influences on physician preferences.

Assessing Trends in Hospital System Structures From 2008 to 2015

BACKGROUND

The Affordable Care Act introduced a major systematic change aimed to promote coordination across the care continuum. Yet, it remains unknown the extent to which hospital system structures have changed following the Affordable Care Act. The structure of hospital systems has important implications for the cost, quality, and accessibility of health services.

OBJECTIVES

To assess trends in the structures of hospital systems.

RESEARCH DESIGN

We aggregated data from the American Hospital Association (AHA) Annual Survey to the system level. Using a panel of hospital systems from 2008 to 2015, we assessed trends in the number of hospital systems, their size, ownership characteristics, geospatial arrangements, and integration with outpatient services.

RESULTS

In the period 2008-2015, there was an increasing percentage of hospitals that were system affiliated as well as growth in the number of hospital systems. A greater percentage of hospital systems that were organized as moderately centralized systems transitioned to centralized systems than to decentralized systems (19.8% vs. 4.7%; P<0.001). In terms of geospatial arrangement, a greater percentage of hub-and-spoke systems moved to a regional design than to national systems (20.0% vs. 8.2%; P<0.05). An increasing trend over time toward greater integration with outpatient services was found in a measure of total system level integration with outpatient services.

CONCLUSIONS

Our findings suggest that hospital systems may be moving toward more regional designs. In addition, the trend of increasing integration offered across hospital systems overall, and as portion of total integration, suggests that systems may be increasing their services along the continuum of care.

Health System Affiliation and 30-Day Readmission After Heart Attack in Black Men

INTRODUCTION

Black patients who experience acute myocardial infarction and receive care in high minority-serving hospitals have higher readmission rates. This study explores how hospital system affiliation (centralized versus decentralized/independent) impacts 30-day readmissions after acute myocardial infarction in black men.

METHODS

In 2018, the Healthcare Cost and Utilization Project State Inpatient Database (2009-2013) was used to observe 30-day readmission for acute myocardial infarction by race, and data from the American Hospital Association Annual Survey of Hospitals (2009-2013) to determine hospital system affiliation for the states Arizona, California, North Carolina, and Wisconsin. A series of hierarchic logistic regressions were conducted to determine if hospital system affiliation mediates the relationship between race and 30-day readmission.

RESULTS

Of 63,743 hospitalizations for acute myocardial infarction among men between 2009 and 2013, black men accounted for 7.1% of hospitalizations and 8.0% of readmissions. In both models, race significantly predicted 30-day readmission (unadjusted OR=1.25, 95% CI=1.14, 1.37, p<0.001; AOR=1.13, 95% CI=1.03, 1.25, p=0.046). After controlling for system type, black men were more likely to be readmitted after acute myocardial infarction than white men in both models (unadjusted OR=1.25, 95% CI=1.14, 1.38, p<0.001; AOR=1.14, 95% CI=1.03, 1.25). There was no difference in odds of being readmitted by race and hospital system type (unadjusted OR=0.88, 95% CI=0.25, 3.07, p=0.84, AOR=1.02, 95% CI=0.21, 5.10, p=0.98).

CONCLUSIONS

Black men appear to be more likely to be readmitted after acute myocardial infarction. Centralization does not appear to mediate the relationship between race and 30-day readmissions for acute myocardial infarction.

SUPPLEMENT INFORMATION

This article is part of a supplement entitled African American Men's Health: Research, Practice, and Policy Implications, which is sponsored by the National Institutes of Health.

Hospital Supply Expenses: An Important Ingredient in Health Services Research

The purpose of this article is to shed light on hospital supply expenses, which form the second largest expense category after payroll and hold more promise for improving cost-efficiency compared to payroll. However, limited research has rigorously scrutinized this cost category, and it is rarely given specific consideration across cost-focused studies in health services publications. After reviewing previously cited estimates, we examine and independently validate supply expense data (collected by the American Hospital Association) for over 3,500 U.S. hospitals. We find supply expenses to make up 15% of total hospital expenses, on average, but as high as 30% or 40% in hospitals with a high case-mix index, such as surgery-intensive hospitals. Future research can use supply expense data to better understand hospital strategies that aim to manage costs, such as systemization, physician–hospital arrangements, and value-based purchasing.

Characteristics of High- and Low-Efficiency Hospitals

We compared performance, operating characteristics, and market environments of low- and high-efficiency hospitals in the 37 states that supplied inpatient data to the Healthcare Cost and Utilization Project from 2006 to 2010. Hospital cost-inefficiency estimates using stochastic frontier analysis were generated. Hospitals were then grouped into the 100 most- and 100 least-efficient hospitals for subsequent analysis. Compared with the least efficient hospitals, high-efficiency hospitals tended to have lower average costs, higher labor productivity, and higher profit margins. The most efficient hospitals tended to be nonteaching, investor-owned, and members of multihospital systems. Hospitals in the high-efficiency group were located in areas with lower health maintenance organization penetration and less competition, and they had a higher share of Medicaid and Medicare admissions. Results of the analysis suggest there are opportunities for public policies to support improved efficiency in the hospital sector.

Impact of Health System Affiliation on Hospital Resource Use Intensity and Quality of Care

OBJECTIVE

To assess the impact of hospital affiliation, centralization, and managed care plan ownership on inpatient cost and quality.

DATA SOURCES

Inpatient discharges from 3,957 community hospitals in 44 states and American Hospital Association Annual Survey data from 2010 to 2012.

STUDY DESIGN

We conducted a retrospective longitudinal regression analysis using hierarchical modeling of discharges clustered within hospitals.

DATA COLLECTION

Detailed discharge data including costs, length of stay, and patient characteristics from the Healthcare Cost and Utilization Project State Inpatient Databases were merged with hospital survey data from the American Hospital Association.

PRINCIPAL FINDINGS

Hospitals affiliated with health systems had a higher cost per discharge and better quality of care compared with independent hospitals. Centralized systems in particular had the highest cost per discharge and longest stays. Independent hospitals with managed care plans had a higher cost per discharge and better quality of care compared with other independent hospitals.

CONCLUSIONS

Increasing prevalence of health systems and hospital managed care ownership may lead to higher quality but are unlikely to reduce hospital discharge costs. Encouraging participation in innovative payment and delivery reform models, such as accountable care organizations, may be more powerful options.