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GAO on Integrated Delivery Systems

By November 23, 2010Commentary

Hospitals and physicians have for several decades now worked on creating integrated delivery systems.  The obvious potential benefit of these systems is greater provision and coordination of all the health care needed by a particular patient.  Concern has been expressed about the extent to which the promise of these systems is being met, as well as their effects on health care costs and spending.  The Government Accounting Office recently released a report on these systems which is based on interviews with executives at fifteen representative IDSs.  The report describes the nature of the systems, what strategies they use to improve patient care, how they attempt to reach underserved populations and they challenges they face in meeting their objectives.   (GAO Report)

The IDS varied in their organizational structure and the services they provided; but all had extensive inpatient and outpatient facilities and services and several owned health plans.  Most report that their major strategies to improve patient care involve use of EHRs, which facilitate measuring and coordinating evidence-based care.  Most have substantial efforts to reach underserved populations, through special clinics, mobile units and telehealth.   The ones with health plans view them as a facilitator of care coordination and a source of financial resources for other organizational needs.

Major challenges reported by IDSs include the cost and effort required to implement EHRs, which most of the systems interviewed had successfully done to a large extent; the difficulty of changing physician and management cultures, especially around use of guideline-driven care; and obtaining reimbursement for care coordination efforts and underserved populations.  Although GAO did not examine this area, the effect of IDSs on the cost of care is an important topic, particularly as the notion of ACOs gains momentum.  Research suggests that these large delivery systems may in some cases deliver very cost-effective care but also may exert extraordinary market power that results in higher prices.

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