Consolidation by Any Other Name? The Emergence of Clinically Integrated Networks. (20th August 2020)

• Record Type: Journal Article
• Authors: Ridgely, M.S.; Timbie, J.; Duffy, E.; Wolf, L.; Buttorff, C.
• Is Part Of: Health services research. Volume 55:Number 1(2020)
• Page Start: 114
• Page End: 114
• Publication Date: 2020-08-20
• Subjects: Medical care -- Periodicals; Medical care -- Evaluation -- Periodicals; Hospital care -- Periodicals; Health services administration -- Periodicals; 362
• DOI: 10.1111/1475-6773.13493
• Languages: English
• ISSNs: 0017-9124

Abstract

Abstract : Research Objective: A clinically integrated network is a group of health care providers that join together for the stated purpose of improving care and reducing costs. The Federal Trade Commission has established standards for clinically integrated networks for purposes of determining whether cooperation among otherwise competing organizations to jointly negotiate fees runs afoul of antitrust law. However, little is known about how CINs are implemented on the ground and how health systems use CINs to compete in health care markets. Study Design: We conducted explanatory case studies of 24 health systems using in‐depth interviews of c‐suite executives (n = 162), descriptive surveys, and document review. The interview protocols focused on topics such as market context; origin of the health system; structural organization and governance; and the influence of the health system on hospital and physician organization operations. We developed a codebook based on the interview guides. After a multistage process of testing and refining codes, two researchers independently coded the interview data. A high threshold of interrater reliability was achieved (pooled kappa across all codes was 0.84). We used comparative case study analysis to compare and contrast the development of CINs in our sample of health systems. Population Studied: Using secondary data sources, we identified the health system affiliations of all physician organizations publicly reporting performance data in four states that host a health care measurement and improvement collaborative. From the universe of health systems, we selected a purposive sample of 24 health systems to achieve variability on important attributes (eg, size and performance). Principal Findings: Respondents in half of the health systems described the use of a CIN, although the organizational structures and the functions of the CINs varied widely. CINs can be classified into three basic types—those made up of primarily closely affiliated practices, those made up of primarily loosely affiliated practices, and those that represent partnerships among health systems. Conclusions: Health systems are using CINs to adapt to competitive environments and changing payment policies in several ways. CINs allow health systems to (1) move care into lower‐cost settings while retaining referral pathways for their tertiary facilities; (2) extend their geographic reach without the capital and administrative costs of acquiring and onboarding; (3) maximize negotiating leverage while reducing contracting burden; and (4) offer advantages (such as EHR and quality reporting support) to physicians while allowing them to remain in independent practice. Implications for Policy or Practice: Research on competition in health care markets has concentrated on mergers and acquisitions; however, many health systems have begun to use an affiliation approach to expansion and integration with other providers in their market. This approach allows independent physician practices to benefit from some of the strengths of a larger HS without capital outlays or administrative burden to the HS, and to reduce transactional costs for the providers. It remains unclear whether this new model of integration is achieving the purported objectives of improved quality and reduced costs. CINs may have the same negative impact on health care prices as have traditional mergers and acquisitions, and will face considerable challenges in coordinating care across providers that are not fully integrated. Primary Funding Source: Agency for Healthcare Research and Quality.