Linked Together

Clinically integrated networks: One more way hospitals and doctors are being pulled together

Hospitals and physicians are being drawn together ever more tightly, whether it is through IDNs’ acquisition of physician practices, or the formation of accountable care organizations.

There is another integration game in town – the clinically integrated network, or CIN. Though perhaps not as widely known as ACOs, CINs also represent physician/hospital integration. They’re growing in number, and experts believe they have staying power.

“The driver for healthcare in a value-based environment is not one that is going away,” says Aimee Greeter, vice president, Coker Group, a healthcare advisory firm in Alpharetta, Ga. “I don’t think our fee-for-service system is sustainable. Whether it’s called a clinically integrated network or something else, I think the focus on value will be a lasting concept.”

The clinically integrated network, or CIN, is not a new concept. It was defined by the Federal Trade Commission and the Department of Justice as far back as 1996, explains Michael Schweitzer, MD, MBA, vice president, VHA Southeast, who spoke on the topic of clinically integrated networks at VHA’s “Navigating to Excellence Forum” last spring.

That definition? “A network implementing an active and ongoing program to evaluate and modify practice patterns by the network’s physician participants, and create a high degree of interdependence and cooperation among the physicians to control costs and ensure quality.”

Transform healthcare
Like accountable care organizations, or ACOs, clinically integrated networks have the potential to transform healthcare, says Schweitzer. “The focus of both the ACO and CIN is collaboration and coordination of care through quality improvement and cost reduction,” he says. ACOs and CINs both rely on: 1) an IT infrastructure to facilitate exchange of patient information among physicians and other providers, 2) adherence to evidence-based medicine guidelines, 3) well-defined goals for performance improvement, and 4) a system to monitor physician /provider performance against those goals.

Ten years after the FTC and Department of Justice defined the clinically integrated network, fewer than 20 CINs existed, says Schweitzer. “But the healthcare climate has changed significantly since then.” The number of CINs has skyrocketed, he says. “Most important, our patients and nation deserve to experience this transformation of care to better quality at a lower cost.”

ACO’s twin
The clinically integrated network is the ACO’s twin, explains Thomas D. Anthony, attorney at law, Frost Brown Todd LLC, Cincinnati, Ohio. But they serve different markets. ACOs were established under federal statute within the Medicare/Medicaid program – principally Medicare, he says. By definition, then, patients participating in an ACO are primarily Medicare enrollees age 65 or over. CINs, on the other hand, focus on the commercial or self-insured market, that is, primarily people under the age of 65.

Both ACOs and CINs create alignment strategies involving physicians and hospitals, continues Anthony, who is the former CEO of PacifiCare of Ohio. But that’s where the similarities end.

“ACOs are rigid and fixed,” he says. Federal statute has pretty well defined how an ACO operates. CINs, on the other hand, “are highly flexible and organic, and they can change over time,” he says. Participating providers – hospitals, outpatient facilities, physicians, and/or any combination thereof – align themselves and build their structure based on their goals and the needs of the particular geographic market in which they operate.

Says Greeter, the Medicare ACO program is “like a black box,” with a well-defined set of boundaries and rules. “That’s good and bad,” she says. “It’s good in that you know the rules going in, and you know what’s expected of you. But there’s not a lot of flexibility.”

CINs, on the other hand, can be structured in multiple ways, yet still be compliant with the law, she says. “That’s good and bad, too. It’s great in that you have that flexibility. But it also makes it difficult, if you’re creating an organization without any prior experience. You don’t have a definitive ladder to climb.”

Another key difference between ACOs and CINs is the financial risk they are allowed to take.

If the ACO meets all the quality benchmarks, and the population’s cost of care is below an established threshold, the ACO can share in the “savings,” that is, the difference between the actual cost and benchmark cost, says Schweitzer. A clinically integrated network, on the other hand, cannot accept financial risk for the cost of care, though it can negotiate higher base fee-for-service rates or performance incentives with commercial payers.

Unlike the ACO, the CIN isn’t required to take on coordination of the full continuum of care and population health management responsibilities, continues Schweitzer. As CINs mature, however, they often address more complex goals, moving toward managing the health of a broader population.

Physicians’ hopes…and fears
Some physicians see forming or joining a CIN as a viable alternative to getting acquired by a hospital system or IDN.

“It is one of the primary ways independent medical groups are maintaining their independence, while managing to align and befriend hospital systems,” says Anthony. “CINs are flexible enough to accommodate both employed and independent physicians. It can work, and work exceedingly well.”

Says Schweitzer, forming or joining a CIN or an ACO is a way for physicians to collaborate with others to improve quality and patient experience, decrease the cost of care, and benefit financially. That said, physicians may have some reservations about joining a CIN, including these:

  • Some are concerned about what they perceive to be the high cost of the technology infrastructure required to exchange their practice’s health information and data with other providers.
  • Many balk at the significant investment of time needed to develop and maintain a CIN.
  • Some fear they may be asked to comply with “cookbook” medicine instead of using their own judgment or protocols.
  • Some are concerned that the CIN will restrict their ability to refer patients to the specialist or facility of their choice.
  • Some physicians have concerns that sharing their data with other providers may be misinterpreted or reflect poorly on their practice.
  • A small percentage of physicians worry that a CIN may eventually exclude them from the network, restraining their ability to practice.

Physicians who participate in a CIN quickly learn that data transparency is an important part of clinical integration, says Greeter. With outcomes and expense data in hand, participating physicians may question their colleagues about the clinical effectiveness and cost-effectiveness of their practice. “We have seen some tough conversations because of that,” she says.

The prospect of contracting collectively with payers can help some physicians overcome their reservations about joining forces with others in a CIN, she says. But an even greater enticement is the possibility of participating in something that can lead to better care for patients. “You truly do have the ability to make a difference in the quality of care provided,” says Greeter.

Expectations for CINs to lead to improved quality and reduced costs are high. But it’s unlikely these organizations can meet those expectations without a solid IT infrastructure.

“Process improvement is driven by data,” says Schweitzer. “A common electronic medical record is helpful, but not a requirement. More important is the sharing of meaningful and timely information about the patient. Further, a robust reporting system to support the clinical and operational performance metrics to drive improvement is essential. Usually, much time and money is spent on the IT infrastructure to create this health information exchange. Hospitals and health systems can be indispensable partners in this initiative.”

Organizers may face a quandary, however: Physician groups considering joining the CIN may be reluctant to toss out the EMR in which they have invested a couple of hundred thousand dollars and months of training, says Anthony. “There’s strong loyalty in each medical group or hospital to their existing IT platform.”

One way CINs address the issue is by acquiring or building a data registry or warehouse, in which all the participating groups can load their performance data. These registries can categorize information, which users can manipulate to generate the reports that they – and their payers – are seeking. Over time, as the licenses for each of the original groups expires, they can move to a common platform.

Will payers bite?
Payers are showing interest in CINs, according to experts.

“The conversation around CIN development has actively engaged payers and payees in robust discussions,” says Greeter. Payers are attracted to CINs that can build a solid business case – backed by data – around improved quality and cost efficiency.

Some payers are just beginning to put their toes into the ACO and CIN waters, says Anthony. But others, such as Aetna, are much more advanced. “They are moving very quickly into these new payment structures, and moving away from traditional fee-for-service arrangements,” he says.

Says Schweitzer, “The success of a CIN in obtaining payer contracts will depend on each payer’s willingness to negotiate for improved quality through financial incentives for physicians and the physicians’ ability to achieve improved quality and efficiency….Likely goals for better quality and reduced costs will include efforts designed to facilitate and improve chronic disease management, care episode management (for a bundled payment), communication among primary care physicians and specialists, and communitywide care coordination.”

Physician mistrust: CIN’s biggest hurdle

Forget about all the costly capital investments, governance hassles, payer negotiations, etc. Rather, the biggest hurdle facing the young clinically integrated network may very well be the physicians themselves.

“Someone said that independent physicians are the last American cowboys,” says Thomas D. Anthony, attorney at law, Frost Brown Todd LLC, Cincinnati, Ohio. When it involves matters of medical judgment or technique, they can communicate with colleagues with trust and openness. But when it comes to money and business relationships? “They often have a suspicion or lack of trust for their fellow practitioners,” he says.

“When we put these together, we spend a lot of time on process,” says Anthony. “The first several meetings are really about getting to know one another, and developing trust and relationships.” When they started their medical practices, few physicians have ever felt the need to do that, and fewer actually relish the thought.

“But this is a new ballgame,” he says. ACOs and CINs are a new way of approaching the delivery of healthcare. Working as a group is a way to maximize opportunities. “It’s not easy for them,” he says. “But they are getting there.”

Hospitals and doctors: Marriage of convenience

Clinically integrated networks bring physician groups and hospitals together to provide a full continuum of care to a patient population. That can lead to an uneasy – but necessary – alliance.

“Interestingly, there was a predominance of hospital-sponsored CINs” in past years, says Aimee Greeter, vice president, Coker Group. “But over the last two or three years, we have seen more private, entrepreneurial physicians creating their own CINs.” They are doing so for two reasons: 1) to compete with a hospital’s clinically integrated network, or 2) to fill a void where a CIN is lacking.

Even if the CIN is hospital-led, its organizers must encourage heavy physician involvement from the outset, she says. And they must give more than lip service to the concept.

Once the hospital system and physicians have their clinically integrated network off the ground, they will continue to face some thorny questions. “There is perceived value in providing services in the lowest-cost facility,” says Greeter. But hospital administrators wonder how they can be successful in a CIN if they can neither 1) be the low-cost facility, or 2) own the practices of the physicians who are making treatment decisions.