Researchers to Examine Impact of Hospital-Physician Integration

WASHINGTON, D.C. (July 8, 2020) — The George Washington University Milken Institute School of Public Health (Milken Institute SPH) today announced a $3.3 million, five-year grant from the National Heart, Lung and Blood Institute at the National Institutes of Health to study the impact of vertical integration, a growing practice in which hospitals directly employ physicians.

Led by Ali Moghtaderi, PhD, MBA, an assistant professor of health policy and management at Milken Institute SPH, the researchers will assess hospital-physician integration and its impact on healthcare quality, clinical practice and Medicare spending. Proponents of this practice believe that when hospitals directly employ physicians they can boost healthcare value through care coordination, while critics say integration leads to higher costs for insurance companies and patients. The true impact is unknown, Moghtaderi says, as not much research has been conducted on this topic.

“Our study aims to address this critical gap in knowledge,” Moghtaderi said. “We hope our findings will provide solid scientific evidence about vertical integration’s impact on quality and cost.”

Moghtaderi and his team will focus on vertical integration’s impact on cardiology, a field that has seen a dramatic rise in the use of this practice. Moghtaderi said the researchers chose cardiology for four reasons. First, the percentage of cardiologists employed directly by hospitals nationwide has increased from 10 percent in 2007 to 40 percent in 2017, and it is higher in states that do not have restrictions on hospital-physician employment. Second, cardiovascular disease is the leading cause of death in the United States and significantly affects healthcare spending. Third, cardiovascular conditions are complex, and the researchers presume integration practices could affect the processes, outcomes and costs of caring for these conditions. Finally, the integration trend for cardiologists has been spurred in substantial part by much higher Medicare reimbursement for non-invasive cardiac tests and other services conducted in hospital-based outpatient versus office settings.

“Cardiology is an excellent area in which to study the effect of integration,” Moghtaderi said. “The results of our findings in this area could be impactful for other aspects of medical practice.”

The team includes researchers from Northwestern University and the University of Colorado, Denver. They hope that the study’s findings will shed light on the impacts of this trend, information that would be helpful for insurance companies, policymakers and others in the healthcare field.

“If we see quality improvements in hospitals using vertical integration, the findings would justify investing in and encouraging this practice,” Moghtaderi said. “If our study finds no significant effects or negative effects on quality, such evidence would support policies that discourage integration.”