Rice health economists launch project to study physician-hospital integration

The Affordable Care Act (ACA) and changing economic conditions have encouraged the integration of physicians and hospitals, particularly through accountable care organizations and medical homes. Vivian Ho, chair in health economics at Rice University’s Baker Institute for Public Policy, is launching a first-of-its-kind study to advance the understanding of the association between physician-hospital integration and the quality and price of health care.

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“The project will provide valuable information to physicians, hospitals and consumers about the effects of physician-hospital integration,” said Ho, who is also director of the institute’s Center for Health and Biosciences, professor of economics at Rice and professor of medicine at Baylor College of Medicine. “In addition, analysis results could lead policymakers to modify regulations involving the formation of accountable care organizations (ACO), which were introduced into Medicare as part of the Affordable Care Act.”

Marah Short, associate director of the Center for Health and Biosciences, and Ho will serve as co-investigators of the study, which is supported by the federal Agency for Healthcare Research and Quality.

Accountable care organizations give a team of health care providers — primary care physicians, hospitals, specialists and public or private health payers — an incentive to deliver coordinated patient care that yields continuity across time and visits. This coordinated care should improve patient outcomes while slowing cost growth, but integration could also enable hospitals to raise prices, according to Ho and Short. Examining both price and quality of care is necessary to determine the implications of physician-hospital integration for consumers, they said.

To complete their study, the investigators will conduct a before-and-after comparison of integration using data for 2008-2013 drawn from the American Hospital Association Annual Survey, the Medicare Hospital Compare database and multiple state databases that collect detailed hospital-level financial reports. Ho and Short said the Medicare Hospital Compare database provides a novel opportunity to examine quality of care measured by timeliness and effectiveness of care for specific conditions, such as acute myocardial infarction, heart failure and stroke care, and readmission rates within 30 days of a patient being treated for such conditions. The database also provides an opportunity to assess the patient experience through such details as communication with doctors and nurses.

“This project is an important step toward determining the effect on consumers and a building block for future research on the effects of the ACA,” Ho said. “ACOs have been encouraged because policymakers believe that integrated care will improve the quality of patient care. But tighter integration may yield greater market power to health care providers, which could raise prices for consumers in an already expensive market.”