January 19, 2017
The American Medical Association describes clinical integration as “the means to coordinate patient care across conditions, providers, settings and time in order to achieve care that is safe, timely, effective, efficient, equitable and patient-focused”. (1) With the rapid transition from volume to value-based reimbursement, improving care coordination and patient outcomes while reducing operating cost and redundancy becomes essential for independent physician practices to survive and thrive going forward.
Collective bargaining by physicians that compete with one another is considered anti-competitive and prohibited except when physician networks are financially or clinically integrated. The Federal Trade Commission (FTC) has indicated that clinical integration is acceptable as long as providers come together with the goals of improving the quality of care, reducing or controlling costs and improving access… and not simply to bargain for better rates. Faced with payment models that reward care coordination and improved patient outcomes, physicians that value their autonomy and want to succeed in the new healthcare market should consider affiliating with a fully integrated IPA with a care management infrastructure and experience managing risk-sharing contracts.
Why Is Clinical Integration Important?
Coordinating patient care across the full continuum is a daunting, if not impossible, task for individual practitioners given that most providers and organizations practice “in silos” without any meaningful connections or information exchange. In a study of Medicare claims, it was found that the typical Medicare beneficiary saw a median of two primary care physicians and five specialists, collectively working in four different practice settings. Typical patients with multiple chronic conditions saw as many as three primary care physicians and eight specialists in seven different settings. And a study by the Robert Wood Johnson Foundation found that for every 100 Medicare patients treated, each primary care physician would typically have to communicate with 99 physicians in 53 practices to coordinate care.
This fragmented care can adversely impact quality and efficiency. Without adequate care coordination, patients are more likely to receive duplicative diagnostic testing, have adverse prescription drug interactions and have conflicting care plans leading to negative consequences with value-based reimbursement models. (2)
The Case For Joining A Fully Integrated IPA
Accessing the tools, technology and services to improve the quality of care, reduce costs and enhance patient satisfaction are often beyond the financial means, resources and expertise of an independent practice. Some of the benefits that physicians can realize through an affiliation with a clinically integrated IPA include:
- Retaining autonomy while gaining support and leverage as part of a larger organization
- Greater contract bargaining power because of the IPAs size and breadth of services
- Network marketing and contract management services
- Increased revenue and new patients from the IPAs portfolio of health plan contracts
- Access to tools and technology to streamline workflow and improve communication and care coordination
- Coding, credentialing, and documentation support to reduce your administrative burden
- Care management services for managing behavioral health and chronic medical conditions How IPAs Can Help Private Practices Survive and Thrive.
The Seven Components Of A Clinical Integration Network
To be optimally positioned to provide higher quality and more efficient care delivered at a lower cost, many hospitals and physicians are turning to clinical integration as a viable option. There are seven key components to effectively implement a clinical integration network:
1) Legal Options- To legally implement a clinical integration network, participants are required to organize in a structure that supports the following program objectives:
- Establish a network of providers to enhance care coordination.
- Create a model with defined roles for physician leadership.
- Define performance improvement initiatives to demonstrate value.
- Provide a platform for contracting to support care redesign and performance improvement initiatives.
- Negotiate for risk-based contracts.
The vehicle to create the network can be a physician-hospital organization, an IPA or a health system subsidiary (in which the health system is the sole corporate member of the subsidiary and member physicians sign separate legal agreements to participate). The clinical integration network must be an independently governed entity with the objective of improving population health through coordinated programs and interventions.
2) Physician Leadership- Physician leadership and engagement are critical in a clinical integration network to achieve clinical outcomes that can serve as value-drivers within risk-based and pay- for- performance models. The network requires a strong physician-led governing structure to spearhead cultural change that align with outcomes-based reimbursement and to adopt new behaviors such as collaboration across specialties, sharing information, managing utilization, providing proactive care and tracking outcomes.
3) Participation Criteria- Member physicians in the clinical integration network must sign a participation agreement that outlines the expectations and requirements for participating in the clinical integration program. Common criteria includes:
- Maintain IT infrastructure to facilitate clinical, quality and financial data exchange
- Utilize network wide care coordination and referral management systems
- Comply with clinical protocols and care pathways developed by the network
- Participate in all network payer contracts
- Adopt a performance improvement approach to review performance data, making improvements when necessary
- Support RN care management for high risk patients
- Participate in network leadership committees
4) Performance Improvement- Clinical quality and operational improvement projects are necessary components of a clinical integration program. To achieve improvement the network and physician leadership needs to define baseline performance and identify areas where it can demonstrate quality and operational efficiencies. Performance improvement initiatives are typically developed in the following areas:
- Variance and cost reduction- improving operational efficiency
- Clinical efficiency- reducing avoidable and duplicative services
- Care redesign- ensuring that the patient is receiving the right treatment, at the right time, in the right setting, with the right provider
- System optimization- shifting focus to preventive care and population health
- Patient experience- developing provider comparisons
5) Information Technology- IT is the backbone of a clinically integrated network’s value proposition and is critical to improving care coordination and connectivity between providers. The infrastructure needs to be in place to 1) create a longitudinal patient record that allows physicians, nurses and other providers in the care continuum to track patient care in every setting 2) allow clinical, quality and financial data to be exchanged and 3) enable the capture of clinical and claims data from disparate information systems so that performance analytics can be developed on clinical programs, care settings, provider performance and cost utilization.
6) Contracting Options- The clinical integration network can contract with payers, employers or health systems, with contracts ranging from a specific procedure to a population of patients. Clinical integration networks are rewarded for demonstrated value, which is defined as the highest quality care at the lowest cost. The goal is to link clinical outcomes to cost management by aggregating data for the entire network and comparing outcomes to community performance. If the organization can demonstrate improved outcomes with valid data, it will be in a position to negotiate favorable risk-based or shared savings contracts that enhance revenue and drive patient volume.
7) Flow of Funds- Calculation and distribution of incentives to physicians occurs after performance is achieved, typically as a result of cost savings or quality and efficiency programs. Clinical integration networks define “performance” in a variety of ways. Some may distribute incentives based on network compliance to the clinical integration agreement while others may base it on site, specialty or individual performance. (3) (4)
The healthcare industry is changing at a whirlwind pace. Times are definitely tumultuous, leading many independent physicians to consider institutional employment. But employment is not the only option. An affiliation with an IPA will preserve independence while eliminating the isolation, administrative burdens and risks associated with private practice while also providing a strategic “road map” to keep private practice relevant in the marketplace.
But not all IPAs are created equal in terms of structure, services, and goals. Some are purely contracting entities while others offer affiliated practices access to additional tools, technologies, and services to improve care coordination and practice efficiency. Given the shift from volume to value based reimbursement, IPAs that are fully integrated with a care management infrastructure and that have experience managing risk-sharing contracts are optimally positioned for these new payment methodologies.
Scott F. Kronlund, MD, MS
President & Chief Medical Officer
Northwest Physicians Network
- American Hospital Association, “Clinical Integration- The Key to Real Reform”, Trendwatch, February,
- “The 7 Components of a Clinical Integration Network”, Becker’s Hospital Review, October, 2012
- “The 4 Pillars of Clinical Integration: A Flexible Model for Hospital-Physician Collaboration”, Becker’s Hospital Review, November, 2012