Our Position – Insurer vertical control

Vertical integration in healthcare is when a single entity (in this case a private health insurer) controls multiple parts of the healthcare supply chain. In addition to funding healthcare, the private health insurer is also involved in healthcare delivery by owning clinics, hospitals, and pharmacies.

In theory, vertical control can result in more efficient healthcare delivery and provide more convenient, cost effective, and streamlined services. However, it also raises significant concerns regarding patient choice and access, quality of care, market competition, potential increased costs to patients, reduced earnings of doctors, lack of innovation, and lack of clinical autonomy.

Vertical control is frequently viewed as an enabler of managed care, a healthcare delivery model that has gained prominence, particularly in the United States (US). Managed care operates by controlling access to healthcare services, primarily through the restriction of coverage to a network of pre-approved providers. Under managed care, health insurers hold significant control over treatment decisions, requiring individuals to use providers within the network, therefore increasing profits for the insurer while reducing choice and control for the consumer.