Do Integrated Health Care Systems Provide Lower-Cost, Higher-Quality Care?

The Journal of the Academy of Physician Executives
Vol. 40 No. 2
March/April 2014
Kralewski, J., Dowd, B., Savage, M., and Tong, J.

The Accountable Care Organization (ACO) concept proposed by the Affordable Care Act legislation is based on models developed by Integrated Delivery Systems (IDS). It is widely believed that these organizations reduce costs and improve quality of care through better integration and coordination of services. This article attempts to shed light on this issue by analyzing the costs and quality of care provided by 52 medical group practices in a large upper Midwest community. The results show that there is important variance in the costs of care provided by different medical group practices serving a local community. Because the researchers controlled for payment rates and case mix, these findings result from differences in the type and amount of services used to care for similar patients. The researchers found that the IDS group practices were often outperformed by relatively small physician-owned practices. This unexpected finding might result from difficulties encountered in creating a uniform culture in the large, complex health care delivery systems and the technology intense culture of the hospital-based IDS practices. However, findings indicate that there are high-performing medical group practices within all of the ownership categories. These findings raise important questions about the assumptions regarding the performance of integrated health care delivery systems.

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