Partnerships and Value

Reengineering Integrated Care Relationships

January 19, 2017 9:31 am

Some integrated relationships need nuanced adjustments. Others need to be taken apart, inspected carefully, and reassembled.

Integrated care relationships have many advantages. For example, they allow for efficient and effective care coordination, coverage of a large population, and scale efficiencies. But they are not inherently nimble. It takes time to develop the trust, aligned incentives, communication, leadership, decision support, and other attributes required for success.

Meanwhile, they face a constantly changing world with the actions of competitors, allies, and payers and other market developments, and with the emergence of new opportunities to innovate. This external change raises important questions for organizations involved in integrated relationships: How do they determine when internal change is needed, and how do they initiate that change? And is a big change required versus only small, nuanced adjustments?

Contemplating Changes

To be successful, an integrated care network—whether it be a classic integrated delivery system with a health plan, physician group, and hospitals or a clinically integrated network (CIN) with many independent practices—must constantly be looking for ways to improve. But the network’s leaders also must be prepared to manage the changes required to realize those improvements.

Consider the following five common circumstances where leaders invariably face a need for a major change.

Health system consolidation. When an integrated care network is part of a major consolidation, its leaders are confronted with a fundamental change question: How do we adjust to reconcile structural differences?

For example, what changes are required when an academic medical center (AMC) and one or more community health systems merge? The community health system or systems may already have a CIN, an established approach to care coordination, a partial alignment of incentives, and a set of contracting relationships, and the AMC may have taken a very different approach to these issues. Meanwhile, each care network may have its own problems with patient access and with leakage to healthcare providers outside of the system.

This situation requires a relatively broad action plan to “integrate” the different approaches to “integrated care.” The agenda for a consolidated network will necessarily include:

  • An umbrella leadership group
  • A process to decide what should be standardized, what should stay as it is, and what should be redesigned for increased flexibility
  • Care coordination plans by business unit and by service line
  • New internal and external communications plans
  • An intentional plan to evolve a new culture for managers, staff, and physicians

Increase in the network’s scale. The fundamental question here: What are the implications of expanding scale? A successful small integrated care network (for example, started by a physician group and/or a community hospital) often has several physician groups, health systems, and others wanting to join. And there usually are multiple advantages to expansion.

However, the challenges posed by adding new players must be acknowledged. Several important questions must be addressed:

  • Is the strategic fit between the organizations broad enough to endure the test of time?
  • Is there a cultural fit and sufficient alignment in leadership styles?
  • What is the best way to bridge differences in electronic health records?
  • How can new physicians and other leaders best build “ownership” and trust?
  • What is the best way to manage a more geographically extensive organization?

Change in competition. The essential consideration here: How should we respond? Competition for today’s integrated care networks often begins with still larger care networks fighting for the same patients. However, emerging competitors often focus on only specific patient groups, such as millennials who prefer technology-based approaches, orthopedic surgery candidates, or Medicare Advantage patients.

First-generation integrated care networks are accustomed to competing over a geographical area, but they are less accustomed to competing for a specific population segment. This shift in focus may require adjustments in marketing, in use of technology, and in pricing, and a realignment of incentives within the network.

Ineffective business model. When the current business model clearly falls short, the question for leaders is, How do we retool it? Some integrated care leaders fully acknowledge that their current approach will not work for the long term—for example, it may not allow for costs to be reduced sufficently, it may lack the full support of physician practices and other clinical stakeholders, it may rely too much on physicians and not enough on physician extenders, or it may insufficiently leverage technology. And it may be under-capitalized.

Such networks may need a major overhaul—perhaps a new legal contract, a new outside investment, and a new social contract.

Flux in payer strategies. When payers are seeking changes, integrated care network leaders again confront the question of how to adjust. In some states, Medicaid programs are causing changes in how care is delivered and paid for. In some markets, employer groups are prompting significant changes in networks and payment terms.

Significant changes also are expected from the Trump administration. Care networks make sense under almost any plausible scenario for policy changes, but key programs almost inevitably will require adjustments. Meanwhile, significant changes are already underway in many commercial contracts.

Although some integrated care network leaders have resisted these changes from outside forces, others see them as an opportunity to create more sustainable networks for all payers and market segments.

Small Adjustments

Some integrated care network leaders express confidence that change will be incremental and manageable. In a recent strategy session, one leader of physician-sponsored CIN concluded, “We don’t need to change the shape or color of the car, but we do want to retune what’s under the hood.”

This CIN’s leadership team celebrated their organization’s successes in responding to today’s change imperatives, and then identified steps on which to focus for further improvement:

  • While acknowledging quality scores are outstanding, work with our new people.
  • Expand our leadership group, continue to train new physician leaders, and find ways to integrate our physician and other leadership programs.
  • Reduce the use of services outside of our network.
  • Build on the sense of “ownership” with those who did not start the program, especially with physicians who are geographically and organizationally distant from the center.
  • Revise our compensation plans gradually to blend in more population health management objectives.
  • Add chronic care teams in three areas—back clinic, congestive heart failure team, and diabetes team.

Meanwhile, at a classic highly successful integrated physician-hospital system, the leadership team was optimistic, and was making several adjustments. The system found that employers were less interested in population health management than expected. But these employers also were impressed with both the quality of care and the price point. The integrated system’s leaders’ response was to maintain a commitment to population health and wellness within the organization, but to focus marketing and communications with employers and other payer-related groups on a straight definition of value: quality plus service divided by price. One leader put it this way: “In essence, we are making small adjustments outside, while ‘staying the course’ on the inside.”

Adding Nimbleness

Integrated care networks can be nimble when they need to. They must, however, be intentional and diligent. They begin with enormous long-term competitive advantages over less integrated networks. As they change, these networks can benefit from keeping in mind the four types of changes depicted in the exhibit below. 

Four Types of Change

Many integrated care networks are dealing with small adjustments, and either external or internal changes, but not both. Such circumstances obviously are easiest to manage.

Leaders of integrated care networks tend to be a hardy group. They expect to balance a number of needs—needs of the market, needs of patients, needs for sustainable financial models, needs of sponsoring organizations, needs of physicians, needs of staff. They will negotiate the changes, big or small, if they are intentional about the size of the change.

Keith D. Moore, MCP, is CEO, McManis Consulting, Denver, and a member of HFMA’s Colorado Chapter.

Dean C. Coddington is a senior consultant, McManis Consulting, Denver.


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