Center for Improving Value in Health Care
Dec 5, 2012 | 0 comments | Posted by Edie Sonn
Collective Impact, Controlling Costs, Coordinated Care, Integrated Care, Triple Aim, Accountable Care Organizations
What do we mean when we use the term “integrated care”?
This question struck me as I read about a health plan’s recent purchase of a network of providers in another state. The plan CEO and the reporter both used the phrase “integration” to describe the company’s strategy. But the vision of integration that emerged was less about clinical care and more about business share—a vision that differs markedly from that of CIVHC and many other stakeholders. And it’s important to understand that distinction.
Those of us who spend our days thinking about how to achieve the Triple Aim generally use “integrated care” to describe a preferred state of enhanced coordination among practice and delivery settings: between primary care providers and specialists, between physical health and behavioral health, between the population-focused public health system and the patient-specific clinical care system.
But of course there are other implications – chiefly, the vertical integration among health plans, hospitals and physicians of which we’re seeing more and more. We’re not talking here about horizontal mergers between competitors. Rather, this development is about companies at the top purchasing referral sources and market share. In Colorado, we’re seeing hospitals buying up physician practices at a rapid clip. In other parts of the country (Florida, California, Arizona and Nevada – just to name a few), we’re seeing health plans buy primary care and specialty practices and hospitals.
You can call that integration. Or you can call it consolidation. Now, this model holds some appeal if you think of these as competitors to large integrated systems like Kaiser, Intermountain, Geisinger and Mayo. Those systems show that consolidation isn’t inherently bad. But consolidation also holds real dangers when it allows one system to elbow out competition. For those who watched the recent 60 Minutes story, this model may look more like the stranglehold the Italian eyewear manufacturer Luxottica has on the entire international production, distribution and sales chain for eyeglasses. It doesn’t much matter which brand of glasses you buy or where you buy them: you’re buying Luxottica products from Luxottica purveyors (even at Pearle Vision, Target or Costco), and paying the (absurdly high) prices Luxottica sets.
Data show a similar dynamic in health care. A 2011 study by health economist James Robinson in the American Journal of Managed Care showed that costs for certain cardiac and orthopedic procedures were 13-25 percent higher in more concentrated health care markets.
That’s why we need to be careful about how we advocate for “integration.” When it serves patients through better coordination and more efficient delivery of care, it improves care and health and can control costs. But when integration simply enables oligopolistic behavior, costs will undoubtedly rise – and impacts on care and health can go either way.
Remember: clinical integration need not require market consolidation. So, the next time you talk about integrated care, clarify your meaning – and be alive to unintended consequences.
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The One Massive Trend That Will Change Healthcare Forever
Provider Consolidation and Health Spending: Responding to a Growing Problem
About the Author: Edie Sonn is CIVHC's Vice President of Strategic Initiatives. Contact her at firstname.lastname@example.org.
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