6 questions about healthcare integration in the 2020s

November 25, 2020 4:29 pm

The question about whether to integrate was answered more than a decade ago. The questions now are, “How do we take full advantage of integration?” and “What do we integrate next and how?”

Healthcare integration was a critical issue at the start of the 2000s. Healthcare leaders were asking whether their organizations should integrate vertically (e.g., legally integrating the hospital and its medical groups, whether they should integrate with a health plan or whether they should integrate horizontally (e.g., integrating still more hospitals and more medical groups, and covering a larger population).

As these questions were answered in the years since then, the answer was almost always “yes.” Integrate more, and the gains will be even greater. The gains will be in many forms, including:

  • Lower operating costs to serve a given population
  • Lower capital and costs per unit of service
  • Better patient/customer experiences
  • More consistent quality

So where are we now? Here are six questions concerning integration for the next decade.

1. Is all integration good?

Well-designed integration is not anti-competitive. Rather, it actually furthers both competition and innovation. It takes advantage of several forms of creative disruption and process redesign both outside and inside the health system.

Really good integration works like a good orchestra, and/or a good basketball team. There is competition within for everyone to be their best — to be first chair rather than second or third, to be a starter versus sitting the bench. Meanwhile, as the team members play together, they learn how to leverage each other’s strengths. And they learn how to communicate better and more intuitively the longer they work together.

Suboptimal integration typically achieves the legal advantages and the supply chain advantages of integration, but it fails to take advantage of all the other opportunities. For example, suboptimal integration often fails to improve the linkages between specialty and primary care, and it lacks attention to redesigning and monitoring incentives between the health plan and physician offices in order to make both units as efficient and effective as possible.

2. Have we gone wide enough?

The typical integrated health system is much larger than it was 10 years ago. However, well-integrated health systems can go still wider, to reach a broader population, and do it better. They have less bureaucracy within their systems, have already disrupted and redesigned the internal connections and can see where they can do still more.

There are few reasons for really good integrated systems not to go wider. The limitations to going wider often have to do with how key support groups (e.g., communities, community elites and state governments) accommodate them. New political win-wins must be negotiated along with the deal itself.

3. Have we gone deep enough?

First, patients and communities expect health systems to go deeper and to provide a more comprehensive range of services. Health systems already know it is necessary to go further with mental health and the social determinants of health. Also, if they go wider, they also must go deeper still in terms of internal processes, common cultures, new communications tools and redesigned internal incentives. 

If integrated systems go wider and don’t go deeper, patients and communities will begin to perceive they have traded the favorable characteristics of an integrated health care system for the ambiguous (and sometimes limited) characteristics of a conglomerate.

4. Will we develop new models of integrated care?

We are already beginning to see the emergence of new approaches to integration. For example, integrated health systems are starting to develop “common platforms of care,” including common approaches to information systems for electronic health records (with common ties to information on specific illnesses and patient characteristics), common financial systems and common approaches to internal governance, physician office management and many other aspects of care. 

These common platforms can be shared across many integrated health systems. The care platforms are facilitated by the automation of many aspects of care, by common IT vendors and by common data requirements from federal programs (such as the merit-based incentive payment system [MIPS]).  We may be moving closer and closer to a single system of healthcare without consciously deciding to go there.

5. Would we integrate the same things, in the same way, if money were not involved?

The pressures that are pushing integrated health systems to look more and more like each other tend to revolve around money. The differences often are a reflection of leadership — or sometimes of service area or community differences. 

The differences may involve more detailed attention to elements such as the following:

  • Quality
  • Patient service
  • Team members’ opportunities for input
  • Team members’ well-being
  • Development of a common culture 

An organization also can differentiate itself by how well its leadership team “tells its story” and engages others.

Of course, such differences also indirectly affect financial performance. 

6. Would Mother be proud?

Integrated health system leaders should ask whether in 10 years they will approve of the job they did in leading their organizations today. It is likely that leaders of well-integrated health systems will believe they “did the right thing.”

If so, it may be because, in addition to following the opportunities to reduce costs and improve bottom lines, they also did a good job on those aspects of leadership that are more indirectly related to finance. 


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