<![CDATA[Healthcare insurers increasingly pursue closer integration with hospitals to improve coordination, manage medical expenditure, and strengthen long-term performance. Yet integration may also raise prices, intensify market power, and fail to improve care. This conceptual paper develops a Capability-Translation Framework to explain these divergent outcomes through two competing pathways. The core pathway is serial: Insurer-Hospital Forward Integration → Data Integration Capability → Value-Based Healthcare → Sustainable Insurance Performance. Integration is treated as structural enablement rather than a direct source of performance. Data Integration Capability converts structural access into reliable and actionable clinical-financial knowledge, while Value-Based Healthcare is conceptualized as the value-creation mechanism through which that knowledge is embedded in outcome and cost measurement, care coordination, risk stratification, and incentive alignment. Sustainable Insurance Performance is specified as a higher-order formative construct comprising financial viability, operational efficiency, customer value and trust, healthcare outcomes, social legitimacy and access, and adaptive resilience. A competing market-power appropriation pathway explains how integration may generate short-term financial advantage without equivalent multidimensional value creation. Transaction Cost Economics, the Resource-Based View, Dynamic Capabilities, Organizational Information Processing Theory, and Value-Based Healthcare are assigned distinct explanatory roles. The framework therefore explains why similar integration structures may produce sustainable value in some settings but financial-performance decoupling in others and offers testable propositions for future research.]]>
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