Vertical integration and market consolidation in healthcare: Policy drivers and impact on physicians and patient care

As healthcare markets have become increasingly consolidated, the vertical integration of physician practices with hospital networks has drawn additional scrutiny. While vertical integration within healthcare was once predicted to improve efficiency and quality of healthcare delivery, empirical study has uncovered mixed results. In a review of existing literature, vertical integration has yielded inconsistent effects on health quality metrics, with modest improvements at best, but has consistently driven up prices. This article reviews economic theory and the real-world effects of vertical mergers within healthcare and discusses policies driving this trend. Given the impacts of vertical integration on healthcare outcomes, cost, patient choice and physician wellbeing, physicians should advocate for regulations that preserve sufficient competition in healthcare markets and diversity of practice settings.