The Integration and De-integration of Physicians and Hospitals Over Time

Abstract

The Affordable Care Act and changing economic conditions have encouraged an increase in the integration of physicians with hospitals. Current research has focused on the overall trend of tighter integration, but it has not examined the more granular level of how hospitals transition between integration levels. The objective of the study is to examine trends in physician-hospital integration over time. We used the 2008-2013 American Hospital Association annual survey data to designate four forms of integration based on the type of contractual relationship a hospital has with physicians. We examined overall changes in the number and percentage of hospitals engaged in varying forms of physician-hospital integration and the transitions between these integration levels by hospitals over time. Between 2008 and 2013, the share of hospitals with physicians on salary rose from 44 to 55 percent of all facilities. Looser forms of physician-hospital integration, such as joint contractual networks with managed care organizations, decreased in prominence. However, the aggregate shift toward tighter vertical integration masks the fact that many hospitals de-integrated or shifted to less tightly integrated physician-hospital relationships during this time period. The shift to tighter physician-hospital integration is more complex than previously expected. Future studies that distinguish between integration types are essential for setting policies that foster integrated care to improve quality and lower costs, instead of raising prices and harming patient welfare.