Care Transformation Center Blog

Clinical integration, demystified

If someone made a “top 10” list for health care strategy jargon, you’d certainly find “clinical integration” there. In fact, Clinical Integration is listed as one of the American Hospital Association’s eight “advocacy issues” on its website. According to AHA:

“Clinical integration is needed to facilitate the coordination of patient care across conditions, providers, settings, and time in order to achieve care that is safe, timely, effective, efficient, equitable, and patient-focused. To achieve clinical integration we need to promote changes in provider culture, redesign payment methods and incentives, and modernize federal laws.”

Hard to argue with—except that when my Advisory Board colleagues talk about clinical integration, they mean something altogether different.

A legal arrangement for provider collaboration

For many who work on the front lines of delivery system reform, clinical integration is not a generic phrase to describe health care professionals working more closely together. It’s a specific type of legal arrangement that allows hospitals and physicians to collaborate on improving quality and efficiency, while remaining independent entities.

In a clinical integration organization, physicians collectively invest in IT infrastructure, such as disease registries and clinical performance management systems, as well as funding staff dedicated to performance improvement. 

Participating physicians also commit "sweat equity" to improving performance—serving on committees as well as changing their day-to-day clinical practice. And they create explicit plans for how the network will improve care outcomes and efficiency.

In exchange, the physicians can negotiate collectively with insurers for better payment rates (in recognition of their superior quality) or for bonuses based on quality and cost improvements. This collective bargaining would otherwise be illegal, but properly-designed clinical integration arrangements create a “safe harbor” from antitrust rules.

Hospitals often play a role in organizing clinical integration networks; however, the networks are led and operated by physicians.

Why clinical integration matters so much

Today, other than extensive direct physician employment, a clinical integration program is the most effective way to create the incentives, management, and infrastructure for health systems to improve quality and efficiency.

So it's not surprising that clinical integration has surged in popularity in the wake of national health care reform. By late 2012, there were more than 500 clinical integration programs in the U.S., up from a handful just a few years prior. 

Want to learn more?

The Health Care Advisory Board published two must-read research studies on clinical integration: one focused on the key attributes of the model, and another one analyzing the evolution of the most established and effective clinical integration networks as they move from focusing on performance improvement to building up their population management capabilities. 

And if you're seriously considering establishing—or refining—a clinical integration program, our physician strategy consulting group at Southwind has more experience setting up clinical integration networks than any other firm.