Vertical integration in medicine is leading to higher costs and worse health outcomes
With hospitals absorbing more physician practices, medicine is becoming more vertically integrated. In theory, vertical integration in health care makes sense: when physicians work directly for hospitals, rather than in independent practices, there should be greater efficiencies through economies of scale, and better quality of care for patients through coordination and information sharing. The health care system in the United States has been headed in that direction, consolidating at a rapid rate. But a new study by researchers including HKS Associate Professor Soroush Saghafian, director of the M-RCBG-hosted Public Impact Analytics Science Lab, finds that in one representative area of medicine, vertical integration is leading doctors to change the way they approach patient care, with consequent adverse effects on patient health, and is also inflating costs. The problem, they conclude, lies in a system of financial reimbursements that incentivizes the wrong behavior—and addressing that issue may offer a solution. |