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Managed care and physician/hospital integration

M A Morrisey1, J Alexander, L R Burns

  • 1Lister Hill Center for Health Policy, University of Alabama at Birmingham, USA.

Health Affairs (Project Hope)
|January 1, 1996
PubMed
Summary
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Hospitals are slow to adopt new organizational structures for managed care contracting. Those with higher managed care revenue are more likely to use these structures, especially those linking closely with physicians.

Area of Science:

  • Health Services Research
  • Healthcare Management
  • Organizational Studies

Background:

  • Managed care firms increasingly contract with healthcare providers.
  • New organizational structures aim to facilitate these contracting processes.
  • Understanding provider adoption of these structures is crucial for healthcare economics.

Purpose of the Study:

  • To assess the adoption rates of new organizational structures by hospitals and physicians for managed care contracting.
  • To examine the relationship between the use of these structures and managed care revenue.

Main Methods:

  • Analysis of a nationally representative sample of 1,495 U.S. community hospitals.
  • Data collected via a 1993 survey on organizational structures.
  • Statistical examination of participation in organizational forms and its association with managed care revenue.

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Main Results:

  • Only 23.3% of hospitals reported participating in at least one new organizational structure.
  • Hospitals deriving over 15% of revenue from managed care were twice as likely to participate.
  • These hospitals favored structures promoting tighter physician linkages.

Conclusions:

  • Adoption of new organizational structures for managed care contracting is currently limited.
  • Higher managed care revenue is a significant driver for adopting such structures.
  • Structures facilitating closer physician integration are preferred by revenue-rich entities.