Consolidated health systems offer 'marginally better care at significantly higher costs': Study

Consolidated health systems have led to "marginally better care at significantly higher costs," according to a study published Jan. 24 in JAMA

The study was conducted by researchers from Boston-based Harvard Medical School and the National Bureau of Economic Research in Cambridge, Mass., according to a Jan. 24 Harvard Medical School news release.  

"One of the key arguments for hospital mergers and practice acquisition was that health systems would deliver better-value care for patients," the study's first author, Nancy Beaulieu, PhD, said in the release. "This study provides the most comprehensive evidence yet that this isn't happening." 

Dr. Beaulieu is a research associate in the department of healthcare policy in the Blavatnik Institute at Harvard Medical School.

The researchers' analysis included 580 health systems of varying sizes, according to the study. Researchers assessed prices for physician and hospital services and total spending from 2018 commercial claims data. Outcomes were adjusted for patient characteristics and geographic area. 

Their findings suggested that patients whose primary care physicians are part of health systems, on average, received marginally better care and reported slightly better experiences with the healthcare delivery system, compared with patients whose primary care physicians are part of independent practices, according to the release.     

Prices for services from physicians and hospitals within health systems were significantly higher than their independent counterparts, according to the study. Physician services delivered within health systems cost between 12 percent and 26 percent more, compared with independent practices. System-based hospital services cost 31 percent more, on average, compared with care delivered by independent hospitals.

Study author David Cutler, PhD, said that large health systems do have benefits over independent systems. 

"Big systems tend to be less vulnerable to economic downturns and they can provide specialized care that would be difficult to maintain in smaller systems," said Dr. Cutler, who is the Otto Eckstein Professor of Applied Economics at Harvard University. "But the hoped-for cost savings benefits of integrated health systems have not yet materialized."

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