Clinical Integration Trumps Physician Employment Part 2

Clinical Integration may be a smart addition to employing physicians. But how does a hospital/system start; where does it begin?


Last week we wrote about the advantages and characteristics of a clinically integrated network. Today we focus on how to build one. Again, our source is the Healthcare Financial Management Association’s report, Taking Smart Steps Toward Clinical Integration in Health Care.


Building an effective clinically integrated network to complement a hospital/health system’s employed physicians involves the following steps:


Establish the operating model and implementation timeline. Establish a team to manage, monitor and optimize the clinically integrated network including a core group to align internal clinical and business leadership. Key areas of engagement and questions to ask include:

  • Business Development: How will creating a clinically integrated network affect previously planned development initiatives?
  • Physician Enterprise: What role will the clinical leaders and functions of the employed physician group(s) play?
  • Finance: Will the capital budget allow for the necessary investments, or will funding approval require a mid-cycle process?
  • Legal and Contracting: Can existing payer and vendor contracts be extended to clinically integrated network participants in their current format, or will they require renegotiation?
  • Care, Utilization and Quality Management: What resources, protocols and committees could be leveraged by the clinically integrated network to avoid conflicting or duplicative efforts?
  • Technology and Decision Support: Does the capacity exist to combine disparate data sources, and will supplemental resources be needed to meet the clinically integrated network’s reporting and analytics requirements?
  • Outreach and Marketing: How should communication and recruiting efforts be coordinated to ensure community physicians aren’t getting mixed messages about the clinically integrated network?


Identify whom to include. Target the types of physicians needed given the complement of employed physicians, with attention paid to the specific number of physicians needed by specialty. Attention should also be paid to balancing recruitment against the hospital/system’s overall clinical strategy.


Define what’s in it for the physicians. Consider these elements that may attract independent primary and specialist physicians to a clinically integrated network:

  • Preferential access to services of other clinically integrated network members for patients; fewer barriers in care navigation and referral processes
    • Participation in the refinement of quality improvement programs, care management capabilities, etc.
    • Contracting processes that enable physicians to collectively negotiate fee-for-service rates, reap the discounts of the clinically integrated network ’s group purchasing organization, participate in value-based care contracts, and share in the cost savings generated
      • Access to the health system’s IT solutions and network scale


Agree on the tenets that will make it stick. The hospital/health system and the clinically integrated network participants should make a meaningful commitment to core tenets:


  • A physician-led governance model
  • A value-based payer strategy
  • Gauging individual performance against a core set of manageable and understandable metrics
  • Structures in place to encourage patient retention within the network
  • Collaboration principles embraced by all network participants
  • Requisite resources to further the clinical integration program provided by the clinically integrated network


Understand when to say no. Hospitals/health systems can no longer accept all physicians into the network. Potential new arrivals must be considered in light of the current composition of the network. In addition, specific and measurable criteria for vetting must be applied, etc.



Overall Benefits of a Clinically Integrated Network


“Strategically developing a clinically integrated network can positively affect a health system’s financial performance, improve care quality and patient outcomes and accelerate readiness for value-based payment. The clinically integrated network model is an alternative to employment . . . Health systems, especially those experiencing large losses, may no longer be able to afford to grow their physician complement through acquisition and employment. As noted previously, operating expenses per physician are much lower in a clinically integrated than in an employed-only model, and early results indicate that savings generated in terms of medical spend for value-based arrangements track more favorably in a clinically integrated network model than in a predominantly employed model.” (“Taking Smart Steps Toward Clinical Integration in Health Care,” HFMA Weekly, March 27, 2015)


iProtean thanks the Healthcare Financial Management Association for allowing us to liberally quote from its publication.



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