When my team began setting up clinically integrated (CI) networks for our health system clients, the main goals were to align with physicians that were otherwise out-of-reach, broadly improve clinical performance, and to secure some form of accountable payment contracts.
While these are still the core components of any CI network, today’s market-driven evolution from volume to value requires a greater focus on population health management than before—and the most successful networks are making this a priority. But we’ve found three reasons why other CI networks haven’t been able to optimize operations to successfully manage population health.
1. Payer negotiations are unfavorable
Health systems around the country are struggling to use the CI network as a lever to negotiate optimal accountable payment contracts, and it’s no surprise.
Many of them haven’t invested in the resources needed to measure the ROI from care management activities and resource utilization. They also lack a validated proof of concept to illustrate the network’s commitment to population health management—such as success through a self-insured employee population. Unfortunately, since payers are looking for provider partners that can effectively manage the total cost of care, demonstrate ongoing clinical improvement, and continually measure results—these circumstances don’t lead to favorable negotiations for the CI network.
Additionally, many provider networks are interfacing with payers through traditional health system negotiators who are still focused on optimizing the fee-for-service rate structure. Those individuals often don’t consider the additional revenue that can be generated through accountable payment contracts, or more importantly, the market share that would be available as new populations shift to providers within the network. For example, we watched a CI network in the Southwest gain 25,000 new patients in the last six months—from just one commercial contract.
To maximize accountable care opportunities, these contracting discussions should be elevated from traditional negotiators to C-Suite representatives from both the provider and the payer.
2. Referral management isn’t made a priority
We were working with a 13-hospital integrated delivery system and discovered that more than 40% of their employed primary care physicians were directing patients to non-network providers. You can imagine how much revenue and market share they were losing because of this "leakage." And we very often see a similar rate of outgoing referrals at our other CI clients.
Besides the significant hit to revenue, this trend stands directly in the way of population health management efforts. Loose referral practices put the quality of patient care at risk, because referring physicians lose visibility into the ongoing care of their patients. Patients that leave the network don’t receive the population health management benefits that the network has built to coordinate care, measure results, and continuously improve upon outcomes. Unfortunately, many physicians don’t know the damage, clinical and financial, they’re causing by sending patients out-of-network.
Today’s CI networks need to coach their providers and engage them in referral management. This requires more than education to hardwire new practices—it takes updated workflows, tools to detect and quantify leakage, performance transparency to providers, tight care management procedures, and a well-equipped front office staff. Not to mention consumer-focused technologies to promote easy and convenient scheduling.
3. No incentives for reducing inpatient care variation
One of the chief complaints we hear from CI networks that have been operating for over a year is, "We haven’t achieved the acute care efficiencies we expected." And most often, the reason is that network incentives aren’t aligned with the hospital sponsored program, so they lack physician engagement to make meaningful improvements.
Right now, we are partnering with a multi-hospital system in the Midwest to implement a Hospital Efficiency Improvement Program (HEIP)—a contractual arrangement between the hospital and the CI network that aligns them financially in order to tackle inpatient clinical variation, especially in the areas where little to no progress has been made despite significant previous efforts. This unique partnership leads to accelerated improvements which the hospital has not been able to realize on its own.
Here’s how the HEIP works: A subset of independent and employed physicians across multiple specialties are engaged to standardize practices, improve outcomes, and create a more efficient enterprise. As a reward for subsequent gains from this shared accountability, the CI network receives fair market value compensation from the health system for the clinical and operational improvements—and the individual physicians pocket a share of those profits.
At this early stage, our client has already reached $11 million in annualized savings through the HEIP, with a target of $58 million over three years.
A network that works for you, not against you
If your CI network is just a mechanism for contracting and physician alignment, it’s still relevant—but it’s also underutilized. And that could do serious harm to outstanding population health management initiatives.
So before you dump money into the population health hole, take a good look at your CI structure and strategy. Frankly, the opportunities that exist for the next generation of clinically integrated networks are just too good to pass on.