Vertical Integration Has Little Impact on Quality Measures

THURSDAY, Feb. 21, 2019 — Vertical integration between hospitals and physicians has little impact on quality measures, while increased hospital market concentration is strongly associated with reduced quality in measures of patient satisfaction, according to a study published online Feb. 9 in Medical Care Research and Review.

Marah Noel Short and Vivian Ho, Ph.D., both from Rice University in Houston, analyzed 29 quality measures reported to the Centers for Medicare & Medicaid Services Hospital Compare database for 2008 to 2015 to examine the impact of vertical integration and increases in hospital market concentration.

The researchers found that vertical integration had a limited impact on a small number of quality measures. However, across all 10 patient satisfaction measures, increased market concentration was strongly associated with reduced quality at the 95 percent confidence level; six of the measures remained statistically significant with a Bonferroni-corrected P value.

“Our results indicate that vertical integration improves quality for only a limited set of process of care and patient satisfaction measures. But increased hospital market concentration is strongly associated with reduced quality across multiple measures,” the authors write. “With this result in mind, regulators should continue to focus scrutiny on proposed hospital mergers, take steps to maintain competition, and reduce counterproductive barriers to entry.”

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Posted: February 2019

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