Does Vertical Integration Improve Access to Surgical Care for Medicaid Beneficiaries?

Background: Vertical integration is increasingly common among surgical specialties in the US; however, the effect of vertical integration on access to care for low-income populations remains poorly understood. We explored the characteristics of surgical practices associated with vertical integration and the effect of integration on surgical access for Medicaid populations.

Study design: Using a survey of US office-based physician practices, we examined characteristics of 15 surgical subspecialties from 2007 to 2017, including provider sex and specialty, practice payer mix, surgical volume, and county socioeconomic status. Using multivariable logistic regression and time-series analysis, we evaluated practice and provider characteristics associated with vertical integration-our primary outcome-and practice Medicaid acceptance rates-our secondary outcome.

Results: Our analysis included 84,795 unique surgical practices (303,903 practice-years). The rate of vertical integration during the 10-year period was 18.0%, with 72.1% of surgical practices never integrating. Practices that integrated were more likely to accept Medicaid patients than practices that did not (81.0% vs 60.8%, p < 0.001). Accepting Medicaid increased the likelihood of vertical integration relative to practices that did not (odds ratio [OR] 4.20, 95% CI 3.93 to 4.49). Practices that integrated were more likely to accept Medicaid in the future (OR 2.61, 95% CI 2.40 to 2.83), even after adjusting for previous Medicaid acceptance and hospital and time fixed effects.

Conclusions: Surgical practices caring for the underinsured are more likely to join larger health care systems, driven by market characteristics. Vertical integration is associated with future increased rates of Medicaid acceptance among practices, allowing for increased access to surgical care for vulnerable, low-income patients. The potential benefit of increased surgical access for low-income beneficiaries from vertical integration must be balanced with the potential for increased prices.