Why integrated health networks have failed.

Area of Science:

• Health Services Research
• Healthcare Management
• Organizational Studies

Background:

• Healthcare organizations, including hospitals, physicians, and nursing homes, have increasingly pursued mergers and partnerships over the past two decades.
• This trend was driven by expert recommendations emphasizing the necessity of integration for survival in a competitive market.
• Initial enthusiasm for healthcare integration began to wane in the 1990s due to reported difficulties experienced by merged entities.

Purpose of the Study:

• To review the primary rationale behind healthcare organization integration.
• To assess the success of healthcare integration initiatives to date.
• To evaluate the value generated by the healthcare integration 'revolution'.

Main Methods:

• Review of field reports and available evidence on healthcare integration.
• Analysis of the outcomes of mergers and partnerships among hospitals, physicians, and nursing homes.
• Assessment of financial, human, and clinical resources devoted to integration.

Main Results:

• Healthcare integrated networks (IHNS) have generally not fulfilled their initial promises.
• Significant financial, human, and clinical resources invested in integration have yielded limited positive results.
• Quantifiable and sustained financial or clinical value from integration efforts is notably scarce.

Conclusions:

• Healthcare integration initiatives have largely failed to deliver on their expected benefits.
• While market context is important, the overall return on investment for integration has been poor.
• Further critical evaluation of the healthcare integration strategy is warranted.