Accepted for/Published in: JMIR Formative Research
Date Submitted: Nov 18, 2021
Date Accepted: Jan 21, 2022
Date Submitted to PubMed: Feb 21, 2022
Warning: This is an author submission that is not peer-reviewed or edited. Preprints - unless they show as "accepted" - should not be relied on to guide clinical practice or health-related behavior and should not be reported in news media as established information.
Competition and Integration of Health Systems in the Post-COVID-19 New Normal: Results from a Cross-Sectional Survey in the United States
ABSTRACT
Background:
We focus on three types of competition perceptions—external environment uncertainty–related competition (EEUC), technology disruption–driven competition (TDDC), and customer service–driven competition (CSDC); and two integration plans—vertical integration (VINT) and horizontal integration (HINT). We examine (1) how health system characteristics help discern competition perceptions and integration decisions and (2) how environment-, technology-, and service-driven competition aspects influence VINT and HINT among US health systems in the post-COVID-19 new normal.
Objective:
We focus on three types of competition perceptions—external environment uncertainty–related competition (EEUC), technology disruption–driven competition (TDDC), and customer service–driven competition (CSDC); and two integration plans—vertical integration (VINT) and horizontal integration (HINT). We examine (1) how health system characteristics help discern competition perceptions and integration decisions and (2) how environment-, technology-, and service-driven competition aspects influence VINT and HINT among US health systems in the post-COVID-19 new normal.
Methods:
We surveyed a robust group of health system chief executive officers (CEOs) (N = 625) across the United States from February to March 2021. Twenty-two percent of the CEOs (135) responded to our survey. We considered competition and integration aspects from the literature and ratified them via expert consensus. We collected secondary data from the Agency for Healthcare Research and Quality (AHRQ) Compendium of the US Health Systems, leading to a matched data set for 124 health systems. We used inferential statistic comparisons to assess differences across health systems regarding competition and integration and ordered logit estimations to relate competition and integration.
Results:
Health systems generally have a high level of all types of competition perceptions, with the greatest concern being TDDC than EEUC and CSDC. The first set of estimation results shows that size, teaching status, revenue, and uncompensated care burden are the main contingent factors influencing the three competition perceptions. The second set of estimation results reveals the relationships between different competition perceptions and integration plans. For VINT, EEUC has a significant, positive influence (p < .001), while the influence of TDDC is significant but negative (p < .001). The influence of CSDC on VINT is not evident. For HINT, the results are similar for EEUC and TDDC; however, the significance of TDDC is weak (p < .05). The influence of CSDC in the combined model is significant and negative (p < .001).
Conclusions:
Competition-driven integration has subtle influences across health systems. EEUC is a significant factor, with underlying contingent factors such as revenue concerns and leadership as the leading causes of integration plans. However, technology disruption may hinder integrations. Undoubtedly, small and low-revenue health systems facing a high level of competition are likely to merge to navigate the healthcare business successfully. This trend should be a focus of policy to avoid monopolistic markets.
Citation
