Characteristics of Hospitals Affiliated with Centralized Systems

More than half of the nation’s community hospitals are part of a multi-hospital health system. Some systems provide integrated care through centralized management, while other systems are more decentralized with hospitals unified primarily through a shared owner.

Do centralized services and increased communication affect cost and quality of care? Some literature suggests that’s the case. As a first step toward potentially gathering more data on the topic, Healthcare Cost and Utilization Project [HCUP] researchers explored the characteristics of hospitals in centralized health systems [those with centralized physician arrangements and insurance product development] compared to independent hospitals that were not part of a system. Hospitals affiliated with decentralized systems were excluded from the study.

Here are some of the findings:

• Centralized system hospitals were more likely to be larger, urban, not-for-profit, and teaching facilities when compared to independent hospitals.
• The South had the highest proportion of system affiliated hospitals (62%), but only 8% of its hospitals were in a centralized system.
• The Northeast had the greatest ratio of independent hospitals (54%) but also the largest percentage of hospitals in a centralized system (11%).
• Only small differences in payer mix were found between the two groups, although Medicaid as an expected source of payment for inpatient stays was about 5% higher in independent hospitals.
• Patient severity of illness and mortality risk were greater for stays at centralized system hospitals.
• Mean costs per inpatient stay were comparable for centralized system and for independent hospitals.

The researchers caution that these centralized system and independent hospitals  may differ in other ways, so inferences cannot be made from these metrics.

Source: Moore B and others. Characteristics and quality of inpatient stays at hospitals affiliated with health systems, 2009-2012. HCUP Statistical Brief [Agency for Healthcare Research and Quality], no. 197, Dec. 2015. http://www.hcup-us.ahrq.gov/reports/statbriefs/sb197-Characteristics-Quality-Hospitals-Health-Systems.pdf

Posted by AHA Resource Center (312) 422-2050 rc@aha.org