Physician-hospital integration and efficiency of accountable care organizations
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Since the Patient Protection and Affordable Care Act (ACA) has dramatically reduced the number of uninsured, the U.S. healthcare system now faces a tougher challenge: to simultaneously improve quality of care and contain costs. Accountable Care Organizations (ACOs) that hold providers across settings collectively responsible for the quality and costs of care are currently the ACA’s best hope for pursuing the dual goal. Accompanied by the ACO momentum, physicians are increasingly employed by hospitals, leading to greater physician-hospital integration. Though there is evidence that provider consolidation elevated prices, little is known about whether physician-hospital integration in ACOs improves the efficiency of healthcare delivery. This dissertation comprises three studies that seek to understand the impact of physician-hospital integration on ACO efficiency through quantitative analyses of 16 commercial ACOs operating under the Alternative Quality Contract (AQC) launched by Blue Cross and Blue Shield of Massachusetts in 2009. Study 1, Profiling AQC Participants According to Physician-Hospital Integration, investigates whether there are systemic differences in organizational structure, patient population, and composition of healthcare spending between low- and high-integrated AQC participants. The findings suggest that high-integrated organizations tend to be larger in scale, serve more affluent patients, but generally spend more. Study 2, The Impact of Physician-Hospital Integration on ACO Efficiency in Inpatient Care Delivery, examines whether integration leads to improved ACO efficiency in inpatient care delivery. The results indicate that integration is correlated with a reduction in spending aggregated over an episode of inpatient care and a decline in length of stay, with no evidence of elevated readmission rates. Study 3, The Impact of ACO Physician-Hospital Integration on Health Care Spending and Delivery Patterns, explores the association between integration and annual health care expenditures and utilization per person (inpatient, outpatient, and overall). The results suggest that integration is correlated with reduced utilization and increased expenditures; the latter is almost entirely driven by higher spending in outpatient settings. The findings of this dissertation suggest that physician-hospital integration is associated with improved efficiency in inpatient settings. However, when considering a broader scope of health services, its impact on efficiency is mixed.
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