In four posts, Aaron and I will describe how we turn academic papers into interesting blog posts. The first post of the series — on how we read research papers — is now live on the AcademyHealth blog. Go read it!
The following originally appeared on The Upshot (copyright 2016, The New York Times Company).
Considering how much we already pay for health care, you have to wonder why doctors, hospitals and insurance providers so often fail to coordinate their patients’ care.
Your primary care doctor, the hospital you visit and the various specialists you are sent to are typically part of different organizations that do not communicate effectively with one another. Balls get dropped and care suffers. In part, it’s a consequence of siloed medical practice.
Increasingly, however, health care organizations are trying to solve this problem another way. One approach — though there are others — is to consolidate more of the health care you need in one organization called an integrated delivery system. An I.D.S. owns one or several hospitals and also employs physicians across multiple specialties. It may also provide nursing home and rehabilitation care. In some cases, an integrated delivery system may offer its own health insurance plans.
Advocates of this approach claim that the coordinated care an I.D.S. offers is not only better for patients but also reduces duplication and avoids unnecessary services, thus lowering costs. Kaiser Permanente, Intermountain Health System, the Mayo Clinic and Geisinger Health System are some of the integrated delivery systems with reputations for high quality and low costs.
However, the evidence suggests that an I.D.S. doesn’t always improve patient care and keep costs down.
Other research that examined 15 nationally prominent integrated delivery systems found no meaningful differences in the quality of care provided by their flagship hospitals, compared with their main competitors. And it turned out that the I.D.S. hospitals were more costly.
A study published last year in JAMA Internal Medicine found that prices paid for outpatient care by private insurers are higher for organizations that employ more physicians, as integrated delivery systems do. One reason is that insurers pay an additional “facility fee” for care provided in a hospital setting, even if the same care could be provided in a community clinic. “Many have presumed that consolidation is a prerequisite for higher value,” said Dr. Michael McWilliams of Harvard Medical School, an author of the study, “but the only consistent finding from good research is higher prices.”
Another reason prices are higher when hospitals and physicians join forces is that the larger organization has more market leverage. A study published in 2014 in Health Affairs found that when hospitals employ physicians, their market share increases and their prices and spending along with it. Another study, published in JAMA in 2014, examined patients in California; it found that hospital ownership of physician practices is associated with 10 to 20 percent higher spending. Older studies relying on data from the 1990s also found that hospital employment of physicians was associated with higher prices.
The Affordable Care Act and other legislation encourages, though does not require, the formation of larger health care organizations, like integrated delivery systems. For example, electronic health care record requirements included in the law are hard for smaller health care organizations to afford. So practices band together to spread the cost over greater volume. Medicare’s Accountable Care Organization programs pay organizations bonuses if they provide more coordinated, higher-quality and lower-cost care.
But bigger health care organizations aren’t necessarily better. Another study by Dr. McWilliams found that, over all, Medicare’s largest Accountable Care Organization program has not saved money, once bonus payments are factored in. Though a few aspects of health care quality — like higher rates of eye testing for diabetics — were better among Accountable Care Organizations than comparable health care organizations, for many other measures the study found no differences.
But Accountable Care Organizations that are led by primary care physicians not employed by hospitals did save money, Dr. McWilliams said. This suggests that an arms-length relationship between doctors and hospitals may be more efficient. Medicare has started a program to pay primary care physicians more for care management, though a recent study found that a similar, predecessor program has not appreciably improved quality or yielded savings.
Why aren’t new ways of organizing health care better? An answer came as long ago as 1966 from the physician and University of Michigan researcher Avedis Donabedian. He realized that it’s a long way from how health care is organized — whether an I.D.S. or some other arrangement — to better patient health. Just because an integrated delivery system has theoretical benefits of better coordination does not mean it achieves them. Integrated organizations are larger and more diverse. As anyone who has worked in a large company or has managed a large group knows, the more people involved, the harder it is to coordinate activities. In short, the theoretical benefits of an integrated delivery system may be swamped by its sheer size.
The lesson is simple: Coordinating your own care is still a good idea. Don’t count on the health system to do it for you.
It’s fashionable to complain that drug prices are too high. But they’re relatively low for some of them most effective drugs we have — vaccines. That may be the cause of shortages, as my latest AcademyHealth post explains.
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