Vertical Integration and the Transformation of American Medicine

Vertical integration in healthcare has become a dominant trend, whereby hospitals acquire physician practices. Between 2019 and 2022 alone, hospitals acquired 4800 additional practices, and 58,000 more physicians became hospital employees. In turn, the quality and cost of healthcare increasingly depend on whether these services’ integration succeeds.  

In a Perspective for the New England Journal of Medicine, Dr. Dhruv Khullar, assistant professor of population health sciences, Dr. Lawrence Casalino, professor emeritus of population health sciences, and Dr. Amelia Bond, assistant professor of population health sciences, explain the trend and effects of vertical integration in American medicine.  

Research shows that increased prices are the most documented effect of integration. Studies have also found that despite increased costs, the quality of care has not improved and, in some cases, has worsened.  

Drs. Khullar, Casalino, and Bond suggest that additional research can help regulators and policymakers address anticompetitive hospital acquisitions of physician practices. They pose potential research questions to address the structure of integrated health systems and how those systems affect clinicians and patients. They emphasize that determining the effects of vertical integration is crucial in identifying how regulators can help mitigate those effects.  

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