Secondary Logo

Themed issue

Accountable care organizations and vertical integration

Shortell, Stephen M., PhD, MPH, MBA

doi: 10.1097/HMR.0000000000000244
Department: Guest Editorial
Free

Professor of the Graduate School, Blue Cross of California Distinguished Professor of Health Policy and Management Emeritus, Dean Emeritus, Co-Director of Center for Healthcare Organizational and Innovation Research, and Co-Director of Center for Lean Engagement and Research in Healthcare, School of Public Health, University of California, Berkeley.

The author has disclosed that he has no significant relationships with, or financial interest in, any commercial companies pertaining to this article.

FIGURE

FIGURE

As the Centers for Medicare & Medicaid Services extends value-based payment changes involving incentives for accountable care organizations (ACOs) to assume two-sided risk, we need evidence about factors that might be associated with success, making this special theme issue of Health Care Management Review both important and timely. The question is whether and in what ways can the vertical integration (VI) of hospitals, physicians, and postacute care facilities through developing ACOs and related arrangements contribute to meeting the triple aim goals of better care, lower costs, and better population health?

Research across the articles in this issue reveals implications for managing health care organizations. Bazolli, Harless, and Chukmaitov (2017) and Chukmaitov, Harless, Bazzoli, and Deng (2017) found greater integration between hospitals and physicians is associated with greater health information technology and related capabilities. Findings from Hilligoss, Song, and McAlearney (2017) and Lewis et al. (2019) suggest that new boundary-spanning arrangements are needed to coordinate care across the entire continuum of care. From a different perspective, local market and environment factors will influence the opportunities for VI (Hogan et al., 2018), whereas some types of ACOs and VI are associated with better performance on some measures, such as doctor and nurse communication (Diana, Zhang, Yeager, Stoecker, & Counts, 2018) and quality of care (Machta, Mauer, Jones, Furukawa, & Rich, 2018). Lastly, participation in quality improvement collaboratives and alliances presents opportunities for ACOs and VI organizations to learn to develop the capabilities to manage the risk posed by the new payment models (Hurley, Rodriguez, & Shortell, 2017; D'Aunno, Hearld, & Alexander, 2017).

The findings, however, raise the question of what are offsetting quality, patient experience, or related advantages, given evidence that the VI/consolidation of hospitals and physicians is associated with increased prices (Scheffler, Arnold, & Whaley, 2018). Another question is how might provider organizations more quickly develop the capabilities in care redesign and integration to succeed, particularly in managing high-cost, high-complex patients (Blumenthal, Chernof, Fulmer, Lumpkin, & Selberg, 2016)? To answer such questions, we need research on large-scale samples over time that identifies the types of ACOs and VI arrangements that consistently provide superior value-based care.

The distinction between economic integration and clinical integration of care becomes critical in terms of consolidation. Economic integration involves the high-level legal, structural, ownership, and financial relationships between health care organizations, whereas clinical integration is the microlevel ability of provider organizations to coordinate care for patients across conditions, people, and settings over time. Research on the relationship between economic integration and clinical integration is needed to understand, for example, whether consolidation’s impact on prices is mediated or moderated by the degree of clinical integration that is achieved.

Research is also needed on assessing the readiness of health care organizations to take on two-sided risk. Existing research suggests that even the early ACOs with the greatest capabilities to redesign care fell far short of having all of the capabilities needed to do so (Shortell, Ramsay, Baker, Pesko, & Casalino, 2018). Related to developing the necessary capabilities to succeed is the need to identify the most effective ways that this can occur. Specifically, how do organizational characteristics interact with the types of knowledge required, and how is such knowledge best acquired? Do health care organizations that belong to systems learn more quickly than independent hospitals and physician practices? At what stage in an organization’s improvement journey might they best benefit from participation in a quality improvement collaborative versus or along with promoting greater internal learning and experimentation? For example, Hurley et al. (2017) found that the ACO–quality improvement collaborative relationship was partially mediated by their use of internal Lean, Lean plus Six Sigma, and related care redesign and improvement approaches.

As ACOs and related VI care delivery arrangements evolve, we need longitudinal data sets to track changes over time linked to claims-based and related cost, quality, patient experience, and population health metrics. This will permit the development of high-level knowledge of their performance with potential for drawing causal inferences that will assist health care administrators and policy makers. Concurrently, we need qualitative studies that generate fine-grained, nuanced “on the ground” implementation knowledge needed by practitioners. Articles in this Health Care Management Review Special Theme Issue serve as examples of such mixed methods and provide a foundation for future research.

Stephen M. Shortell, PhD, MPH, MBA

Professor of the Graduate School, Blue Cross of

California Distinguished Professor of Health Policy

and Management Emeritus, Dean Emeritus, Co-Director

of Center for Healthcare Organizational and Innovation

Research, and Co-Director of Center for Lean Engagement

and Research in Healthcare, School of Public Health,

University of California, Berkeley

Back to Top | Article Outline

References

Bazolli G. J., Harless D. W., & Chukmaitov A. S. (2017). A taxonomy of hospitals participating in Medicare accountable care organizations. Health Care Management Review, (Epub ahead of print).
Blumenthal D., Chernof B., Fulmer T., Lumpkin J., & Selberg J. (2016). Caring for high need, high-cost patients—An urgent priority. New England Journal of Medicine, 375, 909–911.
Chukmaitov A. S., Harless D. W., Bazzoli G. J., & Deng Y. (2017). Factors associated with hospital participation in Centers for Medicare & Medicaid Services' Accountable Care Organization programs. Health Care Management Review, (Epub ahead of print).
D’Aunno T., Hearld L., & Alexander J. A. (2017). Sustaining multi-stakeholder alliances. Health Care Management Review, (Epub ahead of print).
Diana M. L., Zhang Y., Yeager V. A., Stoecker C., & Counts C. (2018). The impact of accountable care organization participation on hospital patient experience. Health Care Management Review, (Epub ahead of print).
Hilligoss B., Song P. H., & McAlearney A. S. (2017). Coping with interdependencies related to patient choice: Boundary-spanning at four accountable care organizations. Health Care Management Review, (Epub ahead of print).
Hogan T. H., Lemak C. H., Hearld L. R., Sen B., Wheeler J., & Menachemi N. (2018). Market and organizational factors associated with hospital vertical integration into sub-acute care. Health Care Management Review, (Epub ahead of print).
Hurley V. B., Rodriguez H. P., & Shortell S. M. (2017). The role of accountable care organization affiliation and ownership in promoting physician practice participation in quality improvement collaboratives. Health Care Management Review, (Epub ahead of print).
Machta R., Mauer K. A., Jones D. J., Furukawa M., & Rich E. C. (2018). A systematic review of vertical integration and quality of care, efficiency, and patient-centered outcomes. Health Care Management Review, (Epub ahead of print).
Scheffler R. M., Arnold D. R., & Whaley C. M. (2018). Consolidation trends in California’s health care system: Impacts on ACA premiums and outpatient prices. Health Affairs, 37, 1409–1416.
Shortell S. M., Ramsay P. P., Baker L. C., Pesko M. F., & Casalino L. P. (2018). The characteristics of physician practices joining the early ACOs: Looking back to look forward. American Journal of Managed Care, 24, 469–474.
Copyright © 2019 Wolters Kluwer Health, Inc. All rights reserved