At a Glance

To develop an effective and sustainable clinically integrated network (CIN) that positions a healthcare organization for value-based payment and other effects of healthcare reform, leaders of CIN initiatives should:

  • Embrace progress rather than perfection
  • Constrain the development timeline by project managing in reverse
  • Ensure that physician leaders play an oversight role in the development process

For more than a decade, the problem of waste within our nation’s healthcare delivery system has been largely attributed to fragmentation. This perception is based on the premise that utilization and cost of healthcare services tend to be excessive, and outcomes suboptimal, when clinical care is not coordinated across providers and care settings.

To address this challenge, both commercial and governmental payers have begun to explore value-based payment methodologies aimed at reducing risk and waste by promoting increased coordination of healthcare services. Examples include the shared savings, bundled payment, and pay-for-coordination models. The result has been a shift toward shared financial risk among providers and across care settings.

Many hospital and health system leaders have responded by redesigning their delivery systems around narrower and more aligned medical staff subpopulations. In some organizations, this redesign has been centered on a fully integrated, or fully employed, medical staff. In many other organizations—particularly those that are financially or politically unable to pursue a full-employment strategy—the focus has been on achieving care coordination by developing a clinically integrated network (CIN) that includes independent physicians. 

Implementing either of these strategies is easier said than done. There is no doubt that the broad acquisition of physician practices and the ongoing management of a large multispecialty physician group is a recipe for chronic migraines. On the other hand, moving a CIN from concept to reality is no simple matter, in that it requires sustained engagement, alignment, and performance of independent physicians and physician practices. An organization’s leaders should never embark on such an initiative without first having a clear idea of what constitutes an effective CIN and how to go about developing one.

Implementing a CIN

For healthcare organizations seeking to develop a CIN that may allow for joint contracting, achieving clinical integration involves much more than simply pursuing an initiative to coordinate clinical care. In a 1996 statement, the U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) define the requirements for such integration, indicating that it “can be evidenced by ... 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 physicians to control costs and ensure quality.”a

At the highest level, this definition requires aspiring CINs to accomplish four critical tasks:

  • Recruit a comprehensive network of healthcare providers.
  • Engage the providers around a set of value-driving metrics (i.e., quality, cost, and utilization).
  • Develop an infrastructure (information systems and human capital) and implement internal processes to track, monitor, and report on value-based performance.
  • Establish and enforce a policy to hold providers accountable for their performance with respect to the identified value-driving metrics.

These tasks may seem straightforward, but they can pose challenges that belie their apparent simplicity, as many organizations that have embarked upon or completed the CIN development process understand. The path to CIN status is fraught with pitfalls that can prolong an organization’s journey for months to years. Here are tips that can help healthcare organizations avoid such dangers and develop an effective CIN as expeditiously as possible.

Tip No. 1: Avoid the pursuit of perfection. Unlike the Centers for Medicare & Medicaid Services, which provides specific guidance for the formation of accountable care organizations (ACOs) through its Medicare Shared Savings Program, the DOJ and FTC have not taken a prescriptive approach in their guidance for developing CINs. They do not mandate a specific organizational structure, network composition, infrastructure, or program of measures for CINs. Instead, in their 1996 statement, the DOJ and FTC describe general approaches to CIN development that are optional in such an undertaking, including:

  • “Establishing mechanisms to monitor and control utilization of healthcare services that are designed to control costs and assure quality of care”
  • "Selectively choosing network physicians who are likely to further these efficiency objectives”
  • “[Making a] significant investment of capital, both monetary and human, in the necessary infrastructure and capability to realize the claimed efficiencies”

Although the FTC’s and DOJ’s flexibility allows each CIN to respond to the unique needs and constraints of its local healthcare environment, that flexibility also exposes CINs to one of the deepest time-draining sinkholes associated with the clinical integration process: the pursuit of perfection.

An unyielding pursuit of perfection can impede progress throughout the CIN development process, from defining the CIN’s organizational structure and determining the composition of its governing body to selecting an IT platform to identifying the appropriate set of value-driving measures.

Perfectionism can cause a leadership team to succumb to analysis paralysis, an overly iterative decision-making process, which can prompt physician leaders or potential CIN providers eventually to question the program’s feasibility. Moreover, creating an expectation that the CIN will perfectly meet the comprehensive needs of each of its members is, at best, counterproductive because the program will inevitably experience growing pains as it begins its full operations. By seeking consistent positive progress rather than perfection, a healthcare organization pursuing clinical integration can implement a CIN more quickly and sustainably while preparing itself and its members for bumps in the road and making a commitment to resolve any inequities that may arise over time.

Tip No. 2: Develop the project timeline working back from the end points. At a very high level, the process that organizations use to develop a CIN that conforms with the FTC’s and DOJ’s guidance typically includes the following key activities:

  • Establishing an organizational structure
  • Developing a governance structure
  • Determining an operational (committee) structure
  • Identifying and engaging physician and administrative leaders
  • Aggregating a program of value-driving metrics and performance targets
  • Implementing an IT infrastructure
  • Hiring the necessary staff to operate the organization
  • Recruiting a network of physicians capable of meeting the population’s healthcare needs

Organizations have a choice of two approaches when developing the work plan required to establish a fully functional CIN.

The most common approach to CIN project management can be characterized as project managing in drive (or forward). Under this approach, the leadership team determines the required developmental tasks, estimates the time required to complete each task, and then establishes a loose project timeline through an additive process. When project managing in drive, the time required to launch the CIN is the sum of all the time segments required to complete each sequential step. This approach encourages perfectionism because organizations that employ it often find that process steps can become unnecessarily prolonged as leaders attempt to refine adequate solutions into optimal ones.

The alternative, and typically more efficient, approach to CIN project management can be referred to as project managing in reverse. This approach to CIN project management organizes the overall project timeline around high-priority goals and sets specific limits on the time allotted for completion of each step in the project plan. For example, many organizations choose to pilot their CINs with their employees through a self-funded benefits program. To do so, the CIN’s provider network must be in place in time for the employees’ annual benefits elections (typically late summer or early fall), and the program must be fully operational by the beginning of the following calendar year. Project managing in reverse implies that the organization sets the timeframes for each of the steps required to achieve these milestones working backward from the established dates. Framing the decision-making process around CIN leaders’ highest-priority goals helps ensure that the leaders will be more willing to move the CIN development process forward with an adequate, if sometimes imperfect, solution, with the understanding that improvements can still be made over time.

Tip No. 3: Build the CIN up by tearing straw-models down. No CIN will be successful without buy-in. This buy-in must occur at multiple levels. The sponsoring organization must accept the premise that affiliating with a more coordinated provider network will result in a positive ROI for the hospital or health system. The desired payer and/or employer partners must believe that coordinated care will drive down costs, improve quality, and result in a healthier and more productive workforce. Most important, for a CIN even to get off the ground, physicians must believe that the CIN will help them to work more efficiently, provide their patients with higher-quality care, and receive appropriate payment for the effort they invest in support of the CIN’s value proposition.

A common practice that organizations use to promote physician adoption of a CIN is to include physicians in the development process, usually by establishing a governance and committee structure composed predominantly of physician leaders. Although this practice tends to improve overall physician acceptance of the CIN model, it can prolong the development process significantly if the physician leaders’ role is not defined appropriately. Most CIN physician leaders are recruited for such a role because they are recognized as both clinical experts and opinion leaders by their peers. Although these physicians are willing to dedicate a portion of their time to CIN development, one should keep in mind that most of them are, first and foremost, practicing clinicians. When these physicians are put in a position of having to make trade-offs between their clinical and administrative responsibilities, CIN development will typically be prolonged.

Thus, although physician leaders can provide valuable insight into CIN development, it is best for them to assume visionary and oversight roles rather than hands-on development roles. To ensure CIN development proceeds without physician-induced delays, physician-led committees should be most active at the bookends of each development task. At the beginning of a task (e.g., developing a program of value-based measures), the physicians should provide specific direction regarding the principles to be followed for the satisfactory completion of the task. At the end of the task, the physician leaders should be asked to critically evaluate the plans and programs placed before them. Administrative and consulting resources are best suited to complete the work performed between these two bookends.

Physicians are likely to be particularly interested in being asked to critique solutions, and they will tend to be quick to note potential problems or pitfalls. For this reason, progress in CIN development can proceed much more quickly if the physicians’ committee work is focused on creative destruction—that is, tearing down straw models while identifying best practices to build a model that will be meaningful and attractive in the local market. In this way, the sponsoring organization avoids alienating physicians through a dictatorial, top-down development process and allows the physician leaders to put their thumbprint on each aspect of the CIN while also avoiding the inevitable, and sometimes overwhelming, delays that occur when the physician leaders are asked to mold each facet of the CIN with their own hands. 

Positioning the Organization for Reform

Clinical integration has become a strategic imperative for healthcare providers in many markets due to ongoing implementation of healthcare reform legislation and increased adoption of value-based payment models by governmental and commercial payers. As value-based competition increases, most healthcare organizations pursuing CIN strategies cannot afford the luxury of a drawn-out development process. The tips described here provide an effective means for leaders of CIN initiatives to avoid the pitfalls that could prevent them from bringing their networks to market effectively and sustainably. 

John Redding, MD, MBA, PCMH CCE, is manager, physician-hospital alignment, Blue Consulting Services, Chicago.


a. DOJ and FTC, Statements of Anti-Trust Enforcement Policy in Health Care, Statement 8: Enforcement Policy on Physician Network Joint Ventures, revised August 1996.

Publication Date: Friday, November 01, 2013

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