The U.S. is experiencing a sea change in healthcare delivery, with ever more physicians employed by hospitals. Cardiology, in particular, has changed dramatically: a decade ago, 90% of cardiologists were in private practice, while today, in many states, a majority are employed by hospitals. Yet almost nothing is known about how this ?vertical integration? affects patient care or outcomes. We will study the effects of hospital-cardiologist integration for patients hospitalized with incident acute myocardial infarction (AMI) or heart failure (HF), using a novel integration measure and a large, longitudinal Medicare dataset. We will use time variation in the amounts that Medicare FFS pays providers for cardiac tests as a plausibly exogenous driver of integration, which permits difference-in-differences analysis and ?causal? estimates of the effects of integration. Integration proponents argue that integration can improve healthcare ?value? ? increase quality, reduce utilization and cost, or both, through better care coordination and innovation in care delivery. However, there is limited evidence to support these claims. Meanwhile, critics note that integration often leads to higher prices paid by commercial insurers. Cardiology is an excellent area in which to study the effect of integration due to dramatic growth in vertical integration, the importance of cardiovascular disease, and the complexity of AMI and HF treatment, which increases the potential for integration to affect care and outcomes. Our study sample is all cardiologists (~40,000) who care for the 4 million Medicare patients who experience an incident AMI (1.5 million) or HF hospitalization (2.5 million) from 2002-2021. This large, longitudinal sample provides sufficient power to assess a broad range of care processes, patient outcomes, utilization and costs that the potential benefits of integration (care coordination, monitoring, innovation) can plausibly effect. As a basis for this study, we developed, and pilot tested in Colorado, a measure of vertical integration, which substantially outperforms prior measures in avoiding both false negatives (not identifying integrated cardiologists) and false positives (identifying cardiologists as integrated when they are not). It is critically important to patients, providers, insurers, and policymakers to determine how vertical integration affects healthcare quality, outcomes, and cost. CMS is assessing whether to enforce pay parity (thus removing the financial spur for integration) and legislators in several states are debating whether to restrict integration, with limited evidence on its effects. This project is innovative because of its 1) use of a new, validated, accurate measure of vertical integration, 2) use of a DiD research design which permits credible causal inference, 3) evaluation of patients with incident AMI and HF hospitalization across a broad range of care processes, patient outcomes and costs that integration can potentially effect, and 4) use of a large, longitudinal Medicare dataset that provides sufficient power to detect small differences in outcomes.
Understanding the effects of vertical integration on healthcare quality, patient outcomes, and cost will be of high importance to payers and policymakers, in deciding how to respond to the vertical integration trend. If we find quality improvements, this would justify investing in and encouraging vertical integration. If we find no significant effects or negative effects on quality, this would support policies that discourage integration.
