Some features have allowed hospital-led CINs to achieve success.

Nov 16—Clinical Integration Networks (CINs) owned by physician practices are gaining ground over those led by hospitals as physician practices seek a bigger share of potential financial rewards, according to one industry adviser.

Aimee Greeter, senior vice president at the Coker Group in Alpharetta, Ga., said that physicians increasingly are seeking hospital partners to form CINs, rather than the other way around.

“The physician-sponsored CINs have been growing more rapidly,” Greeter said at the annual conference of the Medical Group Management Association in San Francisco. Physicians have largely been spurred to launch CINs because the financial rewards of participating in a hospital-led CIN have been too small for the risk, typically around 15 percent, she said.

A CIN is a collaboration between physicians and usually one hospital or health system to develop and sustain clinical initiatives that focus on delivering defined quality and value. Incentives are based on achievement of pre-determined measures. CINs are legal entities that must follow rules set by the Department of Justice and Federal Trade Commission. Importantly, they are not mergers or acquisitions, as each participating party retains its independence.

An estimated 450 to 750 CINs exist nationwide, Greeter said.

IPAs to Form CINs

The majority of physician-led CINs are developed from the ground up as entirely new structures. However, about 35 percent of physician-led CINs use a dormant Independent Physician Association (IPA) as the platform, Greeter said.

“It's a great platform because it has a lot of similarities” to a CIN, she said, adding that nationally an estimated 40 percent of IPAs are dormant.  

One existing IPA with 400 providers and a large concentration of Medicaid patients used its structure to create a CIN, Greeter said. The IPA invited two payers to participate. The physicians then developed identical metrics for both payers that also aligned with existing measures required through other value-based payment programs. The physician leaders shared monthly reports with clinicians, and required participating physicians to attend at least two of the four quarterly in-person meetings in order to receive the full amount of proceeds garnered from the CIN.

Now in its third year, this CIN has reduced costs across both payers by 32 percent and distributed 47 percent of available dollars to physicians, Greeter said.

Forming a CIN is not as complex as some might think, Greeter said. Physicians can form a CIN without creating a single, merged entity. Formation of a CIN requires only demonstration of a certain degree of clinical integration and creation of a limited liability corporation.

“Not having a single, practicing merged entity should not stop physicians from starting a CIN,” she said.

Hospital-led CINs?

 Hospital-owned CINs, by contrast, have succeeded when they obtain early buy-in from physicians, which created physician champions within the organization to promote the CIN, Greeter said.

One hospital in the southeast that did not get early buy-in from physicians and offered only a 15 percent value-related reward for physicians, saw the physicians turn instead form their own CIN, and the two CINs remain in competition today, she said.

“By having physicians engaged, hospitals are able to achieve much greater success,” she said.

One not-for-profit teaching hospital with 1,250 beds chose incremental development of a CIN by starting with a blood utilization project that cut costs in one year by $568,000, or 7 percent. A second project on surgical supply chain standardization produced $2.8 million in savings, Greeter said.

With this initial success and interest from physicians, hospital leaders were able to justify the formation of a CIN on orthopedics with one payer.

“All these things were possible because physicians were driving it and early success was shown,” Greeter said.

Building on Past Failures

Early CINs sometimes failed because they lacked the infrastructure or buy-in from physicians, Greeter said. For instance, data was sometimes unavailable for 45 days or more, creating a lag time to make important corrections.

Other pitfalls are the expenses of starting and running a CIN, as well as managing expectations around payments for participating providers, Greeter said. Some CINs set expectations that expenses would consume about 20 percent of total savings, and when the expenses ended up being greater, that created dissatisfaction among physicians.

A new trend in CINs is that physicians will form one with the intention of selling it to a local hospital or a venture-backed firm, Greeter said.

“You are starting to see things like that in the market,” she said.

With the push towards value-based models of care by both Medicare and private payers, CINs have a place in the larger ecosystem of such arrangements, Greeter said. However, they should be structured to last over the long term.

Rebecca Vesely is a freelance writer based in San Francisco. You can follow her on Twitter at @rebvesely.

Publication Date: Wednesday, November 16, 2016