Vertical integration of health insurance and care provision

Does it improve service delivery?

A.P. Hayen, B.R. Meijboom, G.P. Westert

Research output: Contribution to journalArticleScientificpeer-review

Abstract

What happens to the delivery of health services when health insurers integrate with care providers? Health insurers and care providers can choose among different methods when organizing their mutual transactions. We distinguish between standard market- and hierarchical organization. In hierarchies, health insurance and care provision are integrated and coordinated by an overarching entity. This entity may want to lower costs in order to increase its profits. While this behavior may be desirable in light of the growing costs of health care, consumers and policy-makers fear that this containment of costs will come at the expense of quality. We test both hypotheses by analyzing empirical literature and find a strong negative link between integration and costs. Regarding quality, evidence is mixed. Integration seems to alter care experiences, reflecting skepticism towards or discomfort with the entity’s dominant role in providing health care. Objective quality data, such as mortality rates, fail to show a consistent negative effect of integration on health. Regarding the effect of integration on care processes, hierarchies excel in the provision of preventive care, but underprovide services to those who are most in need of health care. We explain our findings by referring to incentive structures at both the organizational and physician level. We conclude that integration of health insurance and care provision may only be beneficial for subgroups of patients. This implies that, optimally, governments should create a legal base for hierarchical organization while initiating quality transparency, such that these subgroups can select themselves into hierarchies.
Original languageEnglish
Pages (from-to)215-225
JournalInternational Public Health Journal
Volume3
Issue number2
Publication statusPublished - 2011

Fingerprint

Delivery of Health Care
Insurance Carriers
Administrative Personnel
Health Personnel
Health Services
Physicians

Cite this

@article{77aff499469549ffa1a8b51f83d91029,
title = "Vertical integration of health insurance and care provision: Does it improve service delivery?",
abstract = "What happens to the delivery of health services when health insurers integrate with care providers? Health insurers and care providers can choose among different methods when organizing their mutual transactions. We distinguish between standard market- and hierarchical organization. In hierarchies, health insurance and care provision are integrated and coordinated by an overarching entity. This entity may want to lower costs in order to increase its profits. While this behavior may be desirable in light of the growing costs of health care, consumers and policy-makers fear that this containment of costs will come at the expense of quality. We test both hypotheses by analyzing empirical literature and find a strong negative link between integration and costs. Regarding quality, evidence is mixed. Integration seems to alter care experiences, reflecting skepticism towards or discomfort with the entity’s dominant role in providing health care. Objective quality data, such as mortality rates, fail to show a consistent negative effect of integration on health. Regarding the effect of integration on care processes, hierarchies excel in the provision of preventive care, but underprovide services to those who are most in need of health care. We explain our findings by referring to incentive structures at both the organizational and physician level. We conclude that integration of health insurance and care provision may only be beneficial for subgroups of patients. This implies that, optimally, governments should create a legal base for hierarchical organization while initiating quality transparency, such that these subgroups can select themselves into hierarchies.",
author = "A.P. Hayen and B.R. Meijboom and G.P. Westert",
year = "2011",
language = "English",
volume = "3",
pages = "215--225",
journal = "International Public Health Journal",
issn = "1947-4989",
publisher = "Nova Science Publishers, Inc.",
number = "2",

}

Vertical integration of health insurance and care provision : Does it improve service delivery? / Hayen, A.P.; Meijboom, B.R.; Westert, G.P.

In: International Public Health Journal, Vol. 3, No. 2, 2011, p. 215-225.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - Vertical integration of health insurance and care provision

T2 - Does it improve service delivery?

AU - Hayen, A.P.

AU - Meijboom, B.R.

AU - Westert, G.P.

PY - 2011

Y1 - 2011

N2 - What happens to the delivery of health services when health insurers integrate with care providers? Health insurers and care providers can choose among different methods when organizing their mutual transactions. We distinguish between standard market- and hierarchical organization. In hierarchies, health insurance and care provision are integrated and coordinated by an overarching entity. This entity may want to lower costs in order to increase its profits. While this behavior may be desirable in light of the growing costs of health care, consumers and policy-makers fear that this containment of costs will come at the expense of quality. We test both hypotheses by analyzing empirical literature and find a strong negative link between integration and costs. Regarding quality, evidence is mixed. Integration seems to alter care experiences, reflecting skepticism towards or discomfort with the entity’s dominant role in providing health care. Objective quality data, such as mortality rates, fail to show a consistent negative effect of integration on health. Regarding the effect of integration on care processes, hierarchies excel in the provision of preventive care, but underprovide services to those who are most in need of health care. We explain our findings by referring to incentive structures at both the organizational and physician level. We conclude that integration of health insurance and care provision may only be beneficial for subgroups of patients. This implies that, optimally, governments should create a legal base for hierarchical organization while initiating quality transparency, such that these subgroups can select themselves into hierarchies.

AB - What happens to the delivery of health services when health insurers integrate with care providers? Health insurers and care providers can choose among different methods when organizing their mutual transactions. We distinguish between standard market- and hierarchical organization. In hierarchies, health insurance and care provision are integrated and coordinated by an overarching entity. This entity may want to lower costs in order to increase its profits. While this behavior may be desirable in light of the growing costs of health care, consumers and policy-makers fear that this containment of costs will come at the expense of quality. We test both hypotheses by analyzing empirical literature and find a strong negative link between integration and costs. Regarding quality, evidence is mixed. Integration seems to alter care experiences, reflecting skepticism towards or discomfort with the entity’s dominant role in providing health care. Objective quality data, such as mortality rates, fail to show a consistent negative effect of integration on health. Regarding the effect of integration on care processes, hierarchies excel in the provision of preventive care, but underprovide services to those who are most in need of health care. We explain our findings by referring to incentive structures at both the organizational and physician level. We conclude that integration of health insurance and care provision may only be beneficial for subgroups of patients. This implies that, optimally, governments should create a legal base for hierarchical organization while initiating quality transparency, such that these subgroups can select themselves into hierarchies.

M3 - Article

VL - 3

SP - 215

EP - 225

JO - International Public Health Journal

JF - International Public Health Journal

SN - 1947-4989

IS - 2

ER -