The role of managed care in integrated delivery networks

Health care reform, especially if as anticipated via a capitated payment system, will lead providers to integrate the services they provide to the community with those of other organizations. Vertical integration strategies, such as the formation of physician-hospital organizations, and horizontal integration through alliances and holding companies, are the primary vehicles that hospitals and other providers will use to establish integrated networks. By including insurers and primary care physicians in the network and developing information systems to support the delivery of high quality, cost-effective services, the networks can offer a full continuum of care and minimize service duplication.