Organization and Performance of US Health Systems

Abstract

ImportanceHealth systems play a central role in the delivery of health care, but relatively little is known about these organizations and their performance.ObjectiveTo (1) identify and describe health systems in the United States; (2) assess differences between physicians and hospitals in and outside of health systems; and (3) compare quality and cost of care delivered by physicians and hospitals in and outside of health systems.Evidence ReviewHealth systems were defined as groups of commonly owned or managed entities that included at least 1 general acute care hospital, 10 primary care physicians, and 50 total physicians located within a single hospital referral region. They were identified using Centers for Medicare & Medicaid Services administrative data, Internal Revenue Service filings, Medicare and commercial claims, and other data. Health systems were categorized as academic, public, large for-profit, large nonprofit, or other private systems. Quality of preventive care, chronic disease management, patient experience, low-value care, mortality, hospital readmissions, and spending were assessed for Medicare beneficiaries attributed to system and nonsystem physicians. Prices for physician and hospital services and total spending were assessed in 2018 commercial claims data. Outcomes were adjusted for patient characteristics and geographic area.FindingsA total of 580 health systems were identified and varied greatly in size. Systems accounted for 40% of physicians and 84% of general acute care hospital beds and delivered primary care to 41% of traditional Medicare beneficiaries. Academic and large nonprofit systems accounted for a majority of system physicians (80%) and system hospital beds (64%). System hospitals were larger than nonsystem hospitals (67% vs 23% with >100 beds), as were system physician practices (74% vs 12% with >100 physicians). Performance on measures of preventive care, clinical quality, and patient experience was modestly higher for health system physicians and hospitals than for nonsystem physicians and hospitals. Prices paid to health system physicians and hospitals were significantly higher than prices paid to nonsystem physicians and hospitals (12%-26% higher for physician services, 31% for hospital services). Adjusting for practice size attenuated health systems differences on quality measures, but price differences for small and medium practices remained large.Conclusions and RelevanceIn 2018, health system physicians and hospitals delivered a large portion of medical services. Performance on clinical quality and patient experience measures was marginally better in systems but spending and prices were substantially higher. This was especially true for small practices. Small quality differentials combined with large price differentials suggests that health systems have not, on average, realized their potential for better care at equal or lower cost.

Health Systems—The Present and the Future

“…For better or worse, independent medical practices and solo community hospitals are disappearing as they are acquired by hospital-based health systems. In this issue of JAMA , Beaulieu et al provide a detailed review of the current (2018) prevalence and performance of the 580 health systems they identified in the US. They found that 84% of general acute care hospital beds and 40% of physicians were part of health systems.…”

“…Beaulieu et al had to make many decisions about how to identify systems and the physicians and patients attributed to systems, and how to measure and statistically analyze systems’ performance. Alternative decisions could have been made, which will provide impetus and material for important additional research.…”

“…So how well do health systems perform? In cross-sectional analysis, Beaulieu et al found little if any difference in the quality of care or patient experience between system and nonsystem physicians and hospitals. Prices paid to hospitals for commercially insured patients were 31% higher for system hospitals and approximately 20% higher for system physicians compared with nonsystem hospitals and physicians.…”

“…It is likely that some individual systems provide excellent care, but do certain types of systems, classified by ownership and size, provide better care? Beaulieu et al found that though smaller private systems (n = 233) were most common, 64% of general acute care beds and 80% of physicians were in academic or large nonprofit systems. Overall, quality and patient experience scores varied minimally and inconsistently by system ownership, though patient experience was better in academic than in large for-profit systems.…”

“…The federal government’s Medicare Provider Enrollment, Chain, and Ownership System database is helpful but not sufficient to reliably identify ownership and is not generally available to researchers. Beaulieu et al had special access to this database and needed 24 additional data sources to complete their research. The next decade will be a turbulent time for hospitals and physicians.…”