Evaluating the impact of vertical integration on health system peformance

Vertical integration is grounded in economic theory as a corporate strategy for reducing cost and enhancing efficiency. There were three purposes for this dissertation. The first was to describe and understand vertical integration theory. The review of the economic theory established vertical integration as a corporate cost reduction strategy in response to environmental, structural and performance dimensions of the market. The second purpose was to examine vertical integration in the context of the health care industry, which has greater complexity, higher instability, and more unstable demand than other industries, although many of the same dimensions of the market supported a vertical integration strategy. Evidence on the performance of health systems after integration revealed mixed results. Because the market continues to be turbulent, hybrid non-owned integration in the form of alliances have increased to over 40% of urban hospitals. The third purpose of the study was to examine the application of vertical integration in health care and evaluate the effects. The case studied was an alliance formed between a community hospital and a tertiary medical center to facilitate vertical integration of oncology services while maintaining effectiveness and preserving access. The economic benefits for 1934 patients were evaluated in the delivery system before and after integration with a more detailed economic analysis of breast, lung, colon/rectal, and non-malignant cases. A regression analysis confirmed the relationship between the independent variables of age, sex, location of services, race, stage of disease, and diagnosis, and the dependent variable, cost. The results of the basic regression model, as well as the regression with first-order interaction terms, were statistically significant. The study shows that vertical integration at an intermediate health care system level has economic benefits. If the pre-integration oncology group had been treated in the post-integration model, the expected cost savings from integration would be 31.5%. Quality indicators used were access to health care services and research treatment protocols, and access was preserved in the integrated model. Using survival as a direct quality outcome measure, the survival of lung cancer patients was statistically the same before and after integration. ^

Health outcomes, quality improvement and cost-effectiveness of the Community Diabetes Education (CoDE) program: Results of a randomized controlled trial

The objectives of this dissertation were to evaluate health outcomes, quality improvement measures, and the long-term cost-effectiveness and impact on diabetes-related microvascular and macrovascular complications of a community health worker-led culturally tailored diabetes education and management intervention provided to uninsured Mexican Americans in an urban faith-based clinic. A prospective, randomized controlled repeated measures design was employed to compare the intervention effects between: (1) an intervention group (n=90) that participated in the Community Diabetes Education (CoDE) program along with usual medical care; and (2) a wait-listed comparison group (n=90) that received only usual medical care. Changes in hemoglobin A1c (HbA1c) and secondary outcomes (lipid status, blood pressure and body mass index) were assessed using linear mixed-models and an intention-to-treat approach. The CoDE group experienced greater reduction in HbA1c (-1.6%, p<.001) than the control group (-.9%, p<.001) over the 12 month study period. After adjusting for group-by-time interaction, antidiabetic medication use at baseline, changes made to the antidiabetic regime over the study period, duration of diabetes and baseline HbA1c, a statistically significant intervention effect on HbA1c (-.7%, p=.02) was observed for CoDE participants. Process and outcome quality measures were evaluated using multiple mixed-effects logistic regression models. Assessment of quality indicators revealed that the CoDE intervention group was significantly more likely to have received a dilated retinal examination than the control group, and 53% achieved a HbA1c below 7% compared with 38% of control group subjects. Long-term cost-effectiveness and impact on diabetes-related health outcomes were estimated through simulation modeling using the rigorously validated Archimedes Model. Over a 20 year time horizon, CoDE participants were forecasted to have less proliferative diabetic retinopathy, fewer foot ulcers, and reduced numbers of foot amputations than control group subjects who received usual medical care. An incremental cost-effectiveness ratio of $355 per quality-adjusted life-year gained was estimated for CoDE intervention participants over the same time period. The results from the three areas of program evaluation: impact on short-term health outcomes, quantification of improvement in quality of diabetes care, and projection of long-term cost-effectiveness and impact on diabetes-related health outcomes provide evidence that a community health worker can be a valuable resource to reduce diabetes disparities for uninsured Mexican Americans. This evidence supports formal integration of community health workers as members of the diabetes care team.^