The Growing Integration of Physician Practices: With a Medicaid Side Effect

BACKGROUND:Strategic alignment and integration is currently in vogue throughout the health care industry, but its diffusion and pace have not been documented in recent years. The full range of downstream implications from greater alignment between hospitals and physicians has also not been completely explored. OBJECTIVES:We track the organizational landscape among all office-based US physician practices from 2009 to 2015 and document the degree of vertical integration over time. Then, we examine the implications of vertical integration on practices’ acceptance of publicly insured patients. RESEARCH DESIGN:We use descriptive trends and linear regression models with practice level fixed effects to capture the relationships between within-office changes in integration behavior and changes in public payer acceptance. RESULTS:Independent (nonintegrated) physician practices are still the most common organizational type, but their share is declining as the share of practices integrated with a health system increases 3-fold between 2009 and 2015. Although >80% of practices that are part of a health system accept Medicaid,