Obtaining healthcare can be seen as a hassle, often times one has to go to multiple locations to receive all of the care needed, each facility visited may have their own set of paperwork, rules and regulations, fees, business hours etc., making finding time to get proper care difficult which is why many people elect not to go. Integration of healthcare services seeks to remove this hassle by in essence having all necessary services under one roof, or close by. By doing so, the healthcare industry looks to allow for better workflow, better practices, and increased efficiency leading to improving on patient satisfaction and overall healthcare outcomes.
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The United States healthcare system has frequently been labeled as once that is unsuccessful in achieving the best outcomes yet still accruing outrageous costs for all parties included. The Institute of Medicine (IOM) estimates that 30% of the nation’s annual healthcare budget, around $750 billion dollars, is wasted on inefficient delivery, unnecessary services and medications, as well as excessive administration costs. Organizations often look to decrease exorbitant costs, one method being to examine the current means and systems in place in order to reevaluate and hopefully implement a better system.
While there are many proponents in favor of shifting to integration of healthcare delivery as a means of reducing cost while improving overall health outcomes, there are some that remain skeptical. This paper examines integrated healthcare delivery systems in further detail including defining the concept, listing types and models of integration, and weighing out the benefits and challenges facing integration implementation.
Evolution of Healthcare
The American healthcare system has undergone many changes since its inception. Statistics from the 90’s showed that 44 million Americans, roughly 16% of the nation went without health insurance (“Evolution of Healthcare”, 2018). In 1993, legislation for federal healthcare reform failed to pass in congress, and in 1996 HIPPA sanction privacy regulations while restricting pre-existing conditions for insurance coverage. At the same time, both federal and state agencies launch Operation Restore Trust, seeking to investigate Medicare and Medicaid fraud and abuse (“Evolution of Healthcare”, 2018). By May of 1997, $187.5 million dollars in settlements, fines, and civil monetary penalties were collected (“Evolution of Healthcare”, 2018). As the 90’s rolled on, healthcare costs doubled at the rate of inflation (“Evolution of Healthcare”, 2018)
Healthcare continued its evolution in 2002, with the Nurse reinvestment Act, establishing both educational and other programs to assist with the expanding the nursing field in response to constant shortages (“Evolution of Healthcare”, 2018). In 2003, the Medicare Prescription Drug, Improvement and Modernization Act was passed. This legislation added outpatient prescription drug coverage to Medicare (“Evolution of Healthcare”, 2018). The Deficit Reduction Act passed in 2005, giving states more control over designing and maintaining its Medicaid programs (“Evolution of Healthcare”, 2018). In 2006, both Massachusetts and Vermont pass reforms that require almost universal health insurance coverage (“Evolution of Healthcare”, 2018). As a whole, the nation saw a 4.7 billion dollar spending reduction.
Instituted in January 2011 as an effort to close the coverage gap by 2020, seniors who reach the gap are eligible for a 50% discount on brand name drugs. Also, most insurers must spend 80% of premiums paid by employees on medical care and quality improvements (“Evolution of Healthcare”, 2018). On October of this year, people with disabilities were eligible to receive home as well as community based services through Medicare rather than opting for nursing home-based care (“Healthcare Crisis History”, n.d.).
Studies showed that low-income and underserved populations often had less access to care and therefore had a higher rate of illness (“Healthcare Crisis History”, n.d.). In order to combat this, in March of 2012 federal health programs mandated reporting of ethnic, racial, language and rural population data (“Healthcare Crisis History”, n.d.). In June, the United States Supreme court upholds the Affordable Care Act, and in August preventative measure for women including well-woman visits, gestational diabetes screenings, breast-feeding supplies and contraception is offered to the public free of cost. In September 2012, all insurers were now mandated to use a standardized form to summarize benefits and coverage, making sure to notate excluded services all in one section (“Healthcare Crisis History”, n.d.).
As a requirement, all American citizens needed to obtain healthcare coverage with exemptions for those ineligible for affordable coverage (“Evolution of Healthcare”, 2018), meaning around 32 million Americans will have insurance for the first time. Citizens not in compliance are to pay a $95 per adult and $47.50 per child penalty or 1% of their family income. Medicaid is also available to individuals earning less than 133% of the poverty level, there is no annual dollar limitation on coverage, and small business health insurance tax credits rose 50%.
Penalties for families without health insurance continued to rise, $325 per adult and $162.50 per child or 2% of its family’s income in 2015, and in 2016 penalties rose to $695 per adult and $347.50 per child or 2.5% family income respectively (“Evolution of Healthcare”, 2018). In January 2018, businesses with more than 50 employees must provide health coverage or pay a fee.
Integrated Healthcare Delivery
Defining Integrated Healthcare
While there is no one single definition of an integrated delivery system (IDS), a few have develop their own concepts. The first concept defines an IDS as an organized, coordinated and collaborative network that: (1) links various health care providers, via common ownership or contract, across three domains of integration- economic, noneconomic, and clinical – to provide a coordinated, vertical continuum of services to a particular patient population or community and (2) is accountable both clinically and fiscally for the clinical outcomes and health statues of the population or community served, and has systems in place to manage and improve them (Enthoven AC, 2009). Another states that an IDS is a delivery system which “provides or aims to provide a coordinated continuum of services to a defined population and are willing to be held clinically and fiscally accountable for the outcomes and the health statues of the population served (Lega F, 2007).
Types of Integrated Healthcare Systems
Vertical integration is an IDS that has coordination of services among operating units that are at different stages of the process of delivering services (“PAH Organization”, 2008). This type of integration involves organizations that provide different levels of care under one management system. This will lead to an increase in efficiency, forms a larger patient and provider pool, and can improve on quality of care by providing a seamless continuum of care (Al-Saddique, A, n.d.). Examples of this type of integration include acquisitions with physicians and health plans or maintenance organizations such as Academic medical centers and long-term care facilities.
Horizontal integration is defined as the coordination of activities across operating units that are at the same stage in the process of delivering services (“PAH Organization”, 2008). In this type of integration, organizations are grouped together if they provide a similar level of care under one management system, ultimately leading to resource consolidation which should increase efficiency and lower cost. Some examples of horizontal integration include mergers, alliances between neighboring hospitals, and multihospital systems (“EH Institute”, 2004)
Models of Integration
In this model, the IDS is both the provider and payer. This model directly involves physicians in strategic planning (Al-Saddique, A, n.d.). Advantages of this model include amplified collection and integration of data, utilization reviews, and cost control capacity, along with the reduction of duplicated services (Al-Saddique, A, n.d.). Kaiser Permanente is an example organization following this model by only providing services to members with its health plan (“EH Institute”, 2004).
In this model of integration, the IDS or multispecialty group practice (MSGP) does not own a health plan. An example of this is the Mayo Clinic, being the world’s oldest and largest integrated MSGP. Healthcare Partners Medical Group is another example organization, being a nonprofit organized healthcare delivery system (“EH Institute “, 2004)
This model includes private networks of independent providers sharing and coordinating services. Model 3 includes infrastructure services such as performance improvements and care management, similar to models 1 and 2. Other types of structures include management service organizations, group practices without walls, and individual practice associations (Al-Saddique, A, n.d.).
In this model of integration, government-facilitated networks of independent providers both on the regional and local levels are included. Governments play a vital and active role in model 4 by organizing independent providers, creating a delivery system for the recipients (Al-Saddique, A, n.d.). An example of this type of integration is Community Care of North Carolina, which is a public-private partnership.
Benefits of Healthcare Integration
With the implementation of integrated systems, an organization can eliminate healthcare wastes and lower redundancy of services or tests. Through this coordination of in-house services or via networked partners, an organization allows for enhanced quality of care and better overall cost containment.
Due to the nature of integration, an IDS forces increased collaboration and teamwork. As a result of this communication increase, assurance of the care continuum and reduction of unnecessarily duplicated services can be removed. This will ultimately lead to overall patient satisfaction and ensuring patients safety as a result of a more effective and continuous form of care.
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Integration of systems.
Another byproduct of implementing and IDS, integration of systems is a necessity for proper flow and communication of data across networks. Hospital systems are provided with more monitoring and enforcement tools, and since the management authority is governed by the organization it is able to set the standards of care as well as being able to monitor the progress of the program.
Patient centered communication.
As mentioned above, communication is paramount in running an effective IDS, this includes the patient. The readily available communication between a patient, caregiver, and family is crucial in creating the best patient experience. With an emphasis on clear and timely communication from all sides, implementation of an IDS is clear in influencing and improving patient behavior which can result in cost and quality benefits.
Improved pharmaceutical management.
With an IDS implantation, integration of systems will allow for a decrease medication errors as well as having a formulary that is unified, both of which can reduce the cost of pharmaceuticals. It can also assist in the removal of duplicate prescribing of medication. All of the above will have a positive effect on patient safety and overall treatment cost.
As with any other system, implementation always comes with barriers that must be addressed. Integration challenges include unclear financial designation, lack of backing and willingness to implement by organizations current culture, and overall intricacy of the operation. Careful considerations must be taken in regards to selecting and developing partnerships, financial structures, as well as IT platforms, all of which can be limited due to complexity or cost (Maruthappu, Hasan & Zeltner, 2015). Because an organization is attempting to implement an integrated system, it is most likely replacing a current financial division and management structure which can cause issues when first executing. Another challenge that must be addressed is regulation. Regulation is observed over specific providers such as hospitals, health services, insurers etc., however with integrated care regulation must encompass all services across the continuum of care (Carter, K., Chalouhi, E., McKenna, S., & Richardson, B., 2011).
The current consensus on integrated healthcare delivery systems seems to show promise in achieving our overall goal of reducing healthcare costs and improving on patient health outcomes. Many are in favor of shifting to some form of integrated care, whether it be a horizontal or vertical system, however there are some skeptics that are reluctant to fully endorse integration (Carter, K et al., 2011). As this is an evolving concept, one that is not at all set in stone, more research is needed to adequately assess if integration is indeed the best route to take.
- Evolution of Healthcare. (2018, May 16). Retrieved from https://healthadministrationdegree.usc.edu/blog/evolution-of-healthcare/
- Healthcare Crisis History. (n.d..). Retrieved from
- Al-Saddique, A. (n.d..). Integrated Delivery Systems (IDSs) as a Means of Reducing Costs and Improving Healthcare Delivery. Retrieved from http://healthcare-communications.imedpub.com/archive.php
- Enthoven AC (2009) Integrated delivery systems: the cure for fragmentation. Am J Manag Care 15: S284-S290.
- Lega F (2007) Organisational design for health integrated delivery systems: theory and practice. Health Policy 81: 258-279.
- PAH Organization (2008) Integrated delivery networks: concepts, policy options, and road map for implementation in the Americas.
- EH Institute (2004) Integrated Health Care, Literature Review. Washington DC.
- Mahiben Maruthappu, Ali Hasan & Thomas Zeltner (2015) Enablers and Barriers in Implementing Integrated Care, Health Systems & Reform, 1:4, 250-256, DOI: 10.1080/23288604.2015.1077301
- Carter, K., Chalouhi, E., McKenna, S., & Richardson, B. (2011). What it takes to make integrated care work. Health International, 11, 48-55.
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