Integration of health care organizations: using the power strategies of horizontal and vertical integration in public and private health systems

Abstract

Integration in health care attempts to provide all elements in a seamless continuum of care. Pressures influencing development of system-wide integration primarily come from unsustainable cost increases in the United States over the later part of the 20th century and the early 21st century. Promoters of health care integration assume that it will lead to increased effectiveness and quality of care while concurrently increasing cost-effectiveness and possibly facilitating cost savings. The primary focus of this literature review is on the Power Strategies of Horizontal and Vertical Integration. The material presented suggests that vertical integration is most effective in markets where the partners involved are larger and dominant in the regions they serve. The research has also found that integrating health care networks had little or no significant effect on improving overall organizational efficiencies or profits. Capital investment in information technologies still is cost prohibitive and outweighs its benefits to integration efficiencies in the private sector; however, there are some indications of improvements in publicly provided health care. Further research is needed to understand the reasons the public sector has had greater success in improving effectiveness and efficiency through integration than the private sector.