The effect of physician–hospital affiliations on hospital prices in California

Ciliberto, Federico; Dranove, David

doi:10.1016/j.jhealeco.2005.04.008

Cited by 89 publications

(92 citation statements)

References 8 publications

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“…One study in California found that neither vertical integration nor disintegration among hospitals and physicians significantly affected hospital prices. 48 In contrast,another study 49 of 3 states (Arizona, Florida, and Wisconsin) concluded that hospital prices were higher in integrated organizations than in unintegrated hospitals and were highest in exclusive arrangements and in less competitive markets.ACOs, in particular, are attempting to replicate the benefits of clinical and economic integration historically achieved by common ownership and unified organization in vertically integrated group model and network model HMOs. The key difference is that ACOs seek to achieve these benefits through "virtual integration," using a mix of incentives, information exchange, and contracts to coordinate decision making and organizational objectives.…”

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confidence: 96%

Emerging Lessons From Regional and State Innovation in Value‐Based Payment Reform: Balancing Collaboration and Disruptive Innovation

et al. 2014

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Policy Points:r Public and private purchasers must create a "burning bridge" of countervailing pressure that signals "no turning back" to fee-for-service in order to sustain the momentum for value-based payment.r Multi-stakeholder coalitions must establish a defined set of quality, outcomes, and cost performance measures and the interoperable information systems to support data collection and reporting of value-based payment schemes.r Anti-trust vigilance is necessary to find the "sweet spot" of competition and cooperation among health plans and health care providers.r Provider and health plan transparency of price and quality, supported by all-payer claims data, are critical in driving value-based payment innovation and cost constraint. Context:In recent decades, practitioners and policymakers have turned to value-based payment initiatives to help contain spending on health care and to improve the quality of care. The Robert Wood Johnson Foundation funded 7 grantees across the country to design and implement value-based, multistakeholder payment reform projects in 6 states and 3 regions of the United States. Methods:As the external evaluator of these projects, we reviewed documents, conducted Internet searches, interviewed key stakeholders, cross-validated The Milbank Quarterly, Vol. 92, No. 3, 2014 (pp. 568-623) Emerging Lessons From Innovation in Value-Based Payment Reform 569factual and narrative interpretation, and performed qualitative analyses to derive cross-site themes and implications for policy and practice. Findings:The nature of payment reform and its momentum closely reflects the environmental context of each project. Federal legislation such as the Patient Protection and Affordable Care Act and federal and state support for the development of the patient-centered medical home and accountable care organizations encourage value-based payment innovation, as do local market conditions for payers and providers that combine a history of collaboration with independent innovation and experimentation by individual organizations.Multistakeholder coalitions offer a useful facilitating structure for galvanizing payment reform. But to achieve the objectives of reduced cost and improved quality, multistakeholder payment innovation must overcome such barriers as incompatible information systems, the technical difficulties and transaction costs of altering existing billing and payment systems, competing stakeholder priorities, insufficient scale to bear population health risk, providers' limited experience with risk-bearing payment models, and the failure to align care delivery models with the form of payment. Conclusions:From the evidence adduced in this article, multistakeholder, value-based payment reform requires a trusted, widely respected "honest broker" that can convene and maintain the ongoing commitment of health plans, providers, and purchasers. Change management is complex and challenging, and coalition governance requires flexibility and stable leadership, as market conditions and stakeholder enga...

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confidence: 96%

Emerging Lessons From Regional and State Innovation in Value‐Based Payment Reform: Balancing Collaboration and Disruptive Innovation

et al. 2014

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“…1 A flowchart [3,5,7,10,36]. The literature on physician-hospital alignment before 2000 is notably sparse [24,31,55].…”

Section: Financial Factorsmentioning

confidence: 99%

“…For many hospitals, maintaining the profitable service lines, which include orthopaedics, has influenced the need for collaboration [1,4,7]. However, rising costs associated particularly with joint arthroplasty implants actually started to decrease the profitability of orthopaedic service lines, creating another motivation for physician-hospital collaboration [2].…”

Section: Drivers Motivating Orthopaedic Surgeons To Align With Hospitalsmentioning

confidence: 99%

Factors Driving Physician-Hospital Alignment in Orthopaedic Surgery

Page

Butler

Bozic

2013

Clinical Orthopaedics &Amp; Related Research

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Background The relationships between physicians and hospitals are viewed as central to the proposition of delivering high-quality health care at a sustainable cost. Over the last two decades, major changes in the scope, breadth, and complexities of these relationships have emerged. Despite understanding the need for physician-hospital alignment, identification and understanding the incentives and drivers of alignment prove challenging. Questions/purposes Our review identifies the primary drivers of physician alignment with hospitals from both the physician and hospital perspectives. Further, we assess the drivers more specific to motivating orthopaedic surgeons to align with hospitals. Methods We performed a comprehensive literature review from 1992 to March 2012 to evaluate published studies and opinions on the issues surrounding physicianhospital alignment. Literature searches were performed in both MEDLINE 1 and Health Business TM Elite. Results Available literature identifies economic and regulatory shifts in health care and cultural factors as primary drivers of physician-hospital alignment. Specific to orthopaedics, factors driving alignment include the profitability of orthopaedic service lines, the expense of implants, and issues surrounding ambulatory surgery centers and other ancillary services. Conclusions Evolving healthcare delivery and payment reforms promote increased collaboration between physicians and hospitals. While economic incentives and increasing regulatory demands provide the strongest drivers, cultural changes including physician leadership and changing expectations of work-life balance must be considered when pursuing successful alignment models. Physicians and hospitals view each other as critical to achieving lower-cost, higher-quality health care.

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“…In the health economics literature, these types of mergers are referred to as vertical integrations (Ciliberto 2006;Ciliberto and Dranove 2005;Cuellar and Gertler 2005;Gal-Or 1999;Gaynor 2005;Huckman 2006;Nakamura, Capps, and Dranove 2007), and similar motives are hypothesized for both. Thus, I review previous literature on hospital-physician integration as well as on hospital mergers.…”

Section: Introductionmentioning

confidence: 99%

“…Gal-Or (1999) raised the theoretical possibility that hospital and physician alliances gain collective bargaining power over managed care organizations. However, the empirical evidence regarding the effect of hospital-physician integration on hospital prices is mixed (Ciliberto and Dranove 2005;Cuellar and Gertler 2005;Gaynor 2005). In addition, studies by Town and Vistnes (2001) and Capps, Dranove, and Satterthwaite (2003) imply that hospital mergers have a limited effect on prices unless the consolidating hospitals are direct competitors in the local market.…”

Section: Introductionmentioning

confidence: 99%

Hospital Mergers and Referrals in the United States: Patient Steering or Integrated Delivery of Care?

Nakamura¹

2010

INQUIRY

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Many tertiary care hospitals (acquirers) acquire non-tertiary care hospitals (targets), and some of these mergers lead to a significant increase in referrals from the target to the acquirer. This study examines the hospitals' motives for integration and for increasing referrals using hospital discharge data from the Pittsburgh area. I develop and estimate a model of referral choice based on a reputation mechanism. The results suggest that low- or average-quality acquirers exploit their targets' monopoly power to steer patients to the acquirers. Distinguished acquirers, on the other hand, seem to have motives other than patient steering, including the integrated delivery of care.

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The effect of physician–hospital affiliations on hospital prices in California

Cited by 89 publications

References 8 publications

Emerging Lessons From Regional and State Innovation in Value‐Based Payment Reform: Balancing Collaboration and Disruptive Innovation

Emerging Lessons From Regional and State Innovation in Value‐Based Payment Reform: Balancing Collaboration and Disruptive Innovation

Factors Driving Physician-Hospital Alignment in Orthopaedic Surgery

Hospital Mergers and Referrals in the United States: Patient Steering or Integrated Delivery of Care?

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