Care Transformation Center Blog

Why good CI networks fail—and what to do about it

by Laurie Sprung, PhD

Clinical integration is one of the few effective models we’ve found for getting physicians and hospitals to work together on improving care and to be rewarded for their success.

Today, we estimate there are more than 500 clinically integrated provider networks from coast to coast—and my colleagues and I in Advisory Board Consulting and Management have personally been involved in setting up 85 of them.

Not all CI networks that look good on paper end up succeeding in the real world, though. Here are three reasons we see good CI networks fail—and how to position yourself for the best chance of success.

1. The network isn’t truly physician-led

The legal rules for organizing CI networks require that physicians take a leadership role in the network, although the hospital can set up the infrastructure and the network itself can provide administrative support.

This can be a tricky balance to achieve, because as CI researcher Sarah O’Hara has pointed out, too much independence can lead to redundancy or even rivalry among care management efforts. In some markets, we’ve seen big inefficiencies develop when the CI network is not sufficiently aligned with health system administrators and other system-affiliated physician entities, such as employed medical groups.

However, the CI network needs to be sufficiently independent and physician-led that physicians want to participate. So when a health system sets up the CI network, they also need to make sure that there are true physician champions, including independent physicians, not just at the table but driving the discussion. Otherwise, it could be a great party, but nobody will come.

As I’ve told more than one client, “If these physicians were natural joiners, they would have joined something already!”

2. The CI network never gets appropriate contracts—and the hospital doesn’t help

A CI network only works if payers or employers agree to provide performance-based incentives to the network. And the reality is, not every market has payers or employers eager to create those kinds of contracts.

How can CI networks thrive in a market that isn’t on the forefront of value-based reimbursement? Many health systems start by creating incentives around caring for their own employee population. But beyond that, the health system needs to help bring payers to the table—and be willing to use their analytics, their expertise, and even concessions on other contract terms to get a favorable CI contract in place.

When my Advisory Board Consulting and Management colleagues and I work with health systems on clinical integration strategy, we typically create a thorough economic analysis to understand the full impact of the CI network. That way, the health system can make an informed decision about how hard to fight and for which CI terms in the context of overall payer contracting negotiations.

3. The financial case for the CI network relies too heavily on shared savings contracts

Although we haven’t seen many shared-savings related failures yet, the reality of shared savings programs, including MSSP, is that not all participants will be able to generate the anticipated savings. Across the next several years, CI networks that are banking on shared savings payments to bolster the case for participation are likely to see physicians back out if the shared savings payments don’t live up to initial projections.

We advise CI programs to think about shared savings as “maybe money”—nice if it materializes, but not what anyone should be relying on to get, or keep, physicians engaged in performance improvement efforts.

  • Learn from the most advanced networks: Our study, Next-Generation Clinical Integration, reviews the right mix of contracts and the right infrastructure and tools for managing risk if needed.

Find Out Whether Clinical Integration is Right For You

The good news is that each of these failure points is preventable, with planning, effort, and commitment.

But health systems court disappointment when they create a clinically integrated network without sufficiently engaging physicians, committing to drum up the necessary contracts, or preparing for the risks of risk-based contracts.

My colleagues and I at Advisory Board Consulting and Management are happy to set up a 90-minute roundtable with you and your executive team to discuss whether clinical integration is right for your organization and how to craft the right strategy and road map.