Medical Tuesday Blog

Vertical healthcare

Oct 14

Written by: Del Meyer
10/14/2018 1:41 PM 

Horizontal health care brought competition back into medical care. Whether hospitals, labs, radiology, private practices, urgent care centers and surgical care centers, when all were competing on quality of care and competitive pricing, health care costs decreased.

As hospitals merged, purchased physician practices, urgent care and surgical care centers, laboratories, and x-ray facilities, horizontal care gradually evolved into vertical arrangements with increasing control of systems, increased pricing, reduced competition, restricted referrals to vertical in-line structures. When hospitals tried to purchased insurance companies, they found this was counter-productive and placed a break on gluttony. 

The hospital shed their insurance divisions which were losing money as the hospital charges increased. Both divisions could not make maximal profits working together.

This attempt at vertical anticompetitive health care did not succeed.

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