Certified in Public Health (CPH) Practice Exam

An example of backward vertical integration by an academic medical center is:

1. Offering a managed care health plan

2. Establishing a skilled nursing unit within the hospital

3. Acquiring an established home health agency

4. Taking over a smaller, faith-based health care system

The correct answer is: Offering a managed care health plan

The concept of backward vertical integration involves a healthcare organization expanding its services or operations into areas that are earlier in the supply chain or service continuum, typically to gain greater control over the delivery of services or to capture more of the healthcare market. In this case, offering a managed care health plan represents backward vertical integration for an academic medical center because it allows the organization to control the funding and organizational structure of health services provided to patients. This can result in direct involvement in the financial and operational aspects of care delivery, facilitating comprehensive management of health services and potentially improving patient outcomes through better coordinated care. By establishing these managed care arrangements, the academic medical center may be able to ensure that patients use its own facilities and providers, thus capturing revenue that might otherwise go to other healthcare organizations. This strategic move helps the medical center to integrate more closely with the services it offers, which is a defining characteristic of backward vertical integration. The other choices involve either lateral integration (like acquiring a health system or home health agency) or forward integration (like establishing a skilled nursing unit), which do not align with the principles of backward vertical integration.