Integration Mechanisms and Hospital Efficiency in Integrated Health Care Delivery Systems

This study analyzes integration mechanisms that affect system performances measured by indicators of efficiency in integrated delivery systems (IDSs) in the United States. The research question is, do integration mechanisms improve IDSs' efficiency in hospital care? American Hospital Association's Annual Survey (1998) and Dorenfest's Survey on Information Systems in Integrated Healthcare Delivery Systems (1998) were used to conduct the study, using IDS as the unit of analysis. A covariance structure equation model of the effects of system integration mechanisms on IDS performance was formulated and validated by an empirical examination of IDSs. The study sample includes 973 hospital-based integrated health care delivery systems operating in the United States, carried in the list of Dorenfest's Survey on Information Systems in Integrated Health care Delivery Systems. The measurement indicators of system integration mechanisms are categorized into six related domains: informatic integration, case management, hybrid physician–hospital integration, forward integration, backward integration, and high tech medical services. The multivariate analysis reveals that integration mechanisms in system operation are positively correlated and positively affect IDSs' efficiency. The six domains of integration mechanisms account for 58.9% of the total variance in hospital performance. The service differentiation strategy such as having more high tech medical services have much stronger influences on efficiency than other integration mechanisms do. The beneficial effects of integration mechanisms have been realized in IDS performance. High efficiency in hospital care can be achieved by employing proper integration strategies in operations.