Effects of Integrated Delivery System on Cost and Quality

Integrated health systems are often portrayed as the most effective in providing high-quality care at lower costs. This systematic review assesses the empirical evidence.
Published Online: May 10, 2013
Wenke Hwang, PhD; Jongwha Chang, PhD; Michelle LaClair, MPH; and Harold Paz, MD, MS
Objectives: To perform a systematic review of the current literature to assess the association between integrated healthcare delivery systems and changes in cost and quality.

Methods: Medline, Embase, Cochrane Reviews, Academic Search Premier, and reference lists were used to retrieve peer-reviewed articles reporting outcomes (cost and quality) related to integrated delivery systems. A general Internet search and reference lists were used to retrieve non–peer reviewed publications meeting the same criteria. Included peer and non–peer reviewed publications were based in the United States and were published between the years 2000 and 2011.

Results: A total of 21 peer-reviewed articles and 4 non–peer reviewed manuscripts met the inclusion criteria. Twenty studies showed an association between increased integration in healthcare delivery and an increase in the quality of care. One study reported no changes in quality indicators associated with increased integration. None of these studies measured cost reduction directly, but used reduction in utilization of services instead. Four studies associated decreases in the utilization of services with increases in integration.

Conclusions: The vast majority of studies we reviewed have shown that integrated delivery systems have positive effects on quality of care. Few studies linked use of an integrated delivery system to lower health service utilization. Only 1 study reported some small cost savings.

Am J Manag Care. 2013;19(5):e175-e184
Recent discussion of health reform has placed much emphasis on integrating healthcare delivery systems. Do integrated healthcare systems truly do a better job of providing highquality care while holding down costs? Very few studies have provided empirical evidence.

  • We conducted a systematic literature review (2000-present) including peer-reviewed and non–peer reviewed studies, and analyzed 25 eligible studies that examined integrated delivery systems on the topics of cost and quality.

  • The majority of these studies reported positive correlation between health system integration and quality of care.

  • The evidence on reducing cost of care, however, is rather weak.
The US healthcare system has long been characterized as complex, fragmented, costly, and with significant variation in quality of care. During the health reform debate, many health policy experts have called for the country to reorganize healthcare providers and delivery systems through organizational or virtual integration. The concept of integrated healthcare delivery systems (IDSs) has gained considerable interest. Such systems have been viewed as a better approach to addressing the issues of quality and cost. Indeed, some IDSs are frequently portrayed not just in academic and medical circles but in the popular media as examples of the best, most effective healthcare in this country. However, the evidence used to support such assertions may not have been systematically evaluated. Now that healthcare reform has been enacted and accountable care organizations (ACOs), which have many organizational features similar to those of IDSs, are rapidly being developed and implemented, what do we know about how this approach to organizing healthcare impacts the key factors of quality and cost of care? Do IDSs truly do a better job of providing high-quality care while holding down costs? A comprehensive review of the existing literature that assesses the relationship between IDSs and cost/quality is critically needed.


Much of the recent innovation in US health policy has been based upon a fundamental belief that a higher level of integration will yield a more efficient healthcare delivery system. An IDS presumably provides higher quality and more patient-centric care at lower costs. However, there is no clear definition of what constitutes an IDS. Recently reorganized healthcare delivery systems (eg, ACOs) come in all sizes and shapes, and span a wide spectrum of types and levels of integration. Inconsistency in concept and vague definitions can pose significant challenges as policy makers strive to design policy tools to steer the current healthcare away from uncoordinated and fragmented health systems. Integrated healthcare is complex and has been categorized conceptually in 2 ways: (1) an organized structure that is managed by a financial entity (eg, a financial group that manages different facilities within a healthcare system) or (2) an organized healthcare delivery system that coordinates care and has synchronized functioning.1 An IDS may encompass providers belonging to multiple facilities who are responsible for providing quality patient care rather than providers from a single facility like a hospital or general practice.2,3

Integrated healthcare has numerous definitions.4 The World Health Organization defines integrated delivery as “the organization and management of health services so that people get the care they need, when they need it, in ways that are user-friendly, achieve the desired results and provide value for money.”5(p1) While this definition is focused on the patient experience of integrated delivery, other definitions focus on the responsibility of the system. One such definition states that organized delivery systems consist of “a network of organizations that provides or arranges to provide a coordinated continuum of services to a defined population and is willing to be held clinically and fiscally accountable for the outcomes and health status of the population served.”6(p7) Finally, other definitions focus on the specific services and features that describe an IDS as “one or more hospitals along with physicians, diagnostic centers, and other components of the supply side of the supply chain strive to share information, minimize duplication, and make treatment decisions based upon the institutional best practices.”7(p66)

The preceding concepts and definitions illustrate the complexity and variation involved when discussing IDSs. However, they also help to determine the commonalities present. All of these concepts and definitions include increased communication and information sharing across the care continuum. There is also a common understanding that integrated care should coordinate patient care in a way that improves the patient experience and the quality of the care received.

Jonas and Kovner’s Health Care Delivery in the United States includes the various forms of IDSs under the umbrella of organized healthcare delivery. This book defines organized healthcare delivery as a situation where “Care providers have established relationships and mechanisms for communicating and working to coordinate patient care across health conditions, services, and care settings over time.”8(p206) This definition is broad enough to capture many different system structures, while still including the essential functions that an IDS must possess. Hence, for this systematic review, we include broader definitions of IDS that focus on care coordination and system integration.


Literature Search Strategy and Inclusion Criteria

This systematic literature review provides a comprehensive look at the current peer-reviewed literature on IDSs. It also includes a review of other non–peer reviewed publications on the subject, including white papers and reports from nonprofit and industry organizations. Although these documents have not been independently evaluated through peer-review processes, we believe that these sources can provide valuable insights. Due to the fact that these documents are not required to go through a lengthy review process required for publication in a peer-reviewed journal, they are often the first to report on emerging topics and issues.

For peer-reviewed articles, a systematic literature search was performed in 2012 using Medline, Embase, Cochrane Reviews, and Academic Search Premier, as well as the follow-up references in retrieved articles for outcomes (cost and quality) of IDSs from 2000 to 2011. Search terms included integrated delivery system, integrated care, integrated service network, continuity of care, chains of care, care coordination, coordinated care, provider system integration, and vertical integration.

While the literature search for non–peer reviewed articles was not as systematic as that for the peer-reviewed literature, it was conducted through a similar process. A general Internet search engine was used to find white papers, case studies, and reports from various organizations. Several peer-reviewed publications cited such documents as well, leading to several more studies for consideration. The content of these documents was then assessed to determine the applicability of each paper to this review.

Articles were included if they evaluated outcomes (cost and quality) of IDSs. We excluded theory-based articles, articles not specific to the US health system, and articles published before 2000.


Numerous publications on IDSs were available. However, the majority of this material focused on the key elements required to successfully adapt current health systems to IDSs.9-11 In this review we were interested in articles and papers pertaining to the cost of care associated with IDSs and the quality of care they provide. Previous literature reviews have addressed the issue of how to define and measure integrated healthcare delivery12,13 but did not link integration with outcomes.

After the initial literature search, we identified 168 peerreviewed articles. We excluded 78 based on title and abstract review. A total of 90 full-text articles were assessed for eligibility, 69 of which were not eligible, for a final sample of 21 articles. All 21 articles evaluated some measures of quality of care and correlated these measures with health system integration; 6 of these articles also assessed the impacts on cost of care.

The initial search of the non–peer reviewed literature generated 27 white papers, reports, and case studies for consideration. Of these studies, 13 were excluded based on abstract review. The remaining 14 studies were read in their entirety to assess their eligibility for this review. Those that did not pertain to information on cost or quality outcomes were excluded. This resulted in a final sample of 4 non–peer reviewed publications (Figure).

To synthesize our literature review findings, we abstracted study settings and key findings from all selected papers into 3 domains: health system focus, outcome measures, and conclusion.

Peer-Reviewed Publications

Quality. Enhancing care continuity and coordination are 2 important components of IDSs. With more stringent guideline- or protocol-based care, integrated healthcare systems seemed to provide better quality of care in our systematic review. Out of 21 studies, 19 showed improvement in quality of care with respect to clinical effectiveness,14-22 lengths of stay,23,24 medication errors,21,25,26 and number of office visits.27-32 Compared with non-IDSs, several studies have found more favorable outcomes for patients treated in IDSs for chronic diseases such as diabetes, hypertension, depression, congestive heart failure, and asthma.33 There is evidence of some improvement in the care delivery process as a result of IDSs, which when quantified ranged from 10 to 25 percentage points.30 For example, 4 studies found that IDSs improved patient medication adherence and decreased medication error rates.15,25,26,34

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