Integrated delivery systems

Managed care organizations (MCOs) have been paying health providers through capitation since 1990s. Under the capitation system, financial risk has been shifted from the MCOs to providers. As a result, health providers including physicians and hospitals began to merge or consolidate to share the financial risk by increasing the number of enrollees. Thus, not only did payment through capitation change the health care delivery system in U.S., it also accelerated the development of Integrated Delivery Systems (IDSs). The purpose of this article is to introduce the forces behind the IDSs as well as their players and components. The major players in IDS include physicians, hospitals, and health plans. However, the role of health plan remains controversial. The IDSs is composed of both clinical integration and functional integration. Clinical integration also consists of vertical integration and horizontal integration. Multi-hospital system is one kind of horizontal integration. The development of IDSs is still in process. The players and components in IDSs are also changing with the demand in the health market. Whether IDSs can lead to cost containment remains unclear. In addition, although the IDSs can provide one-stop medical care shopping for enrollees, it is likely they will monopolize the health care market. How to keep the information system updated is also the greatest challenge for IDSs.