Before meaningful gains in improving the value of health care in the US can be achieved, the fragmented nature in which health care is financed and delivered must be addressed. One type of healthcare organization, the Integrated Delivery System (IDS), is poised to play a pivotal role in reform efforts. What are these systems? What is the current evidence regarding their performance? What are the current barriers to their establishment and how can these barriers be removed? This chapter addresses these important questions. Although there are many types of IDS' in the US healthcare landscape, the chapter begins by identifying the necessary healthcare components that encompass an IDS and discusses the levels of integration that are important to improving health care quality and value. Next, it explores the recent evidence regarding IDS performance which, while generally positive, is less than what it could be if there were greater focus on clinical integration. To highlight, the chapter discusses the efficacy of system engineering initiatives in two examples of large, fully integrated systems: Kaiser-Permanente and the Veterans Health Administration. The evidence here is strong that the impact of system engineering methods is enhanced through the integration of processes, goals and outcomes. Reforms necessary to encourage the development of IDS' include: 1) the development of payment mechanisms designed to increase greater inter-dependency of hospitals and physicians; 2) the modification or removal of several regulatory barriers to greater clinical integration; and 3) the establishment of a more robust data collection and reporting system to increase transparency and accountability. The chapter concludes with a framework for considering these reforms across strategic, structural, cultural, and technical dimensions.
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