Just 18% of medical groups were highly integrated with hospitals in 1993, according to a report that measured the prevalence of various integration strategies. Another 5% followed weaker integration models.
Those numbers are bound to increase rapidly, said the author of the analysis, Susan Alt, president of The Business Word of Englewood, Colo.
But some cautioned that seamless delivery and aligned incentives can be more important indicators of success than the type of integration strategy used.
The report, released last month, was sponsored by pharmaceutical company Marion Merrill Dow, Kansas City, Mo. Data were collected by the American Group Practice Association and the Medical Group Management Association. Large groups, which tend to be more integrated, are over-represented, Ms. Alt said.
Groups were considered highly integrated if they functioned as hospitals or departments of hospitals (4.8%), owned hospitals (0.1%), were owned by hospitals (3.9%), or had joint ventures with hospitals (9.1%).
Another 2.2% participated in a hospital-owned medical services organization, and 2.5% of groups participated in a "clinic without walls," a hospital-formed confederation that allows physicians to keep private practices and gain advantages of a larger group.
Integration has been difficult even in the most progressive markets. Duane Dauner, president of the California Association of Hospitals and Health Systems, expects at least half the state's physician groups to be integrated in two or three years-mainly through joint ventures, foundations, medical group subsidiaries and holding companies.
However, the numbers don't show how well physicians and hospitals cooperate to manage risk and negotiate with third-party payers and employers, Mr. Dauner said. "The only measure that really counts when everything is said and done is: Do people enroll in it and do they stay in it?"
Other figures from the report:
Fifty-five percent of group practices had contracts that put them at risk in 1993, up from 50% in 1992.
Four percent of medical groups, and 24% of those with more than 50 physicians, owned part or all of an HMO.
Nearly 90% of medical groups had contracts with HMOs or PPOs in 1993, up from 56% the year before. These contracts generated one-fifth of the groups' total revenues.