Building a High-Performing Clinically Integrated Network

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Daniel Marino:

Welcome to Value-Based Care Insights. I am your host, Daniel Marino. Many of you who listen to my program, as well as a lot of my colleagues, often ask the question, why don't I share some of my own insights? as you know, I bring on some guests, and we end up having some really strong conversations. And part of what I enjoy about that is really diving into their experiences and pulling out the lessons learned, that they've had, that they can share related to what the topic is. But we're gonna do a little… something a little different on today's episode. I'm gonna dive into a little bit of my experience and what I am seeing, share this with you, the audience, related to clinical integration, and really building either clinically integrated networks, or optimizing the networks, and so forth. I thought it would be a great topic to get into today. As many of you know, if you've worked with me, over the years, or if you've connected with me. I'm passionate about value-based care. I've been in… working in the value-based care population health space really since the mid-2000s, for probably close to, you know, over 20 years, maybe even close to 25 years. I got my start working with Advocate Healthcare in Chicago, where we actually did EMR implementations for their independent physicians, and through that, helped them extract the clinical outcomes, into their registries. And really, that was the foundation of clinical integration for Avocate, even before they were… it was known as clinical integration. Back then, it was just managing population health. And since then, I've had the opportunity to work with, I think, probably 200, 250 organizations around the country in helping to set up CINs, even setting up these super CINs, ACOs, and even integrated service lines for academics and for health systems.

So what I'd love to do today is share with you where I see clinical integration at, where organizations are in their development of supporting value-based care, potentially around a clinically integrated network model, and where I see that kind of playing into over these next year, next number of years. So let's dive into this. So, typically, I think organizations are in three spots right now. You have some of the health systems who are… maybe have not developed a CIN, or maybe they've participated in a CIN, but it hasn't advanced like they want to, and so they're interested in developing their own, and starting to create that alignment with their independent physicians. That's the first category. The second category is around, organizations who've had a CIN for, say, you know, 2, 3, even 5 years. But aren't optimizing it. They're not… they're still struggling with their performance. They've got the elements in place, they've got a network, they've got some of the infrastructure, but they're just not performing like they need to perform. And then the third category, which is probably the smallest, category, it's those that are considered the high-performing CINs, that truly are hitting their outcomes and are driving a lot of the performance conversations with their payers. These are really the three that I see, so…Well, you know, let's work through this a little bit, and I'll share some insights and some thoughts.

If you're an organization who's just starting to launch into a CIN, you're asking the question of, how do I start to better integrate with my physicians, my physician community, my independent physicians? Or, how do we start to partner with other hospitals in the community that allows us to create a stronger network, that allows us to, leverage maybe our services, whether it's ancillary services, leverage some of the clinical services that we have, and really position ourselves to engage in some level of value-based contracting. And as we're starting to… as you're starting to think through that, the question often comes up as to how we start to create culture alignment and start to create that transformation from fee-for-service into value-based care.

Now, of course, if you're a large health system, or you're in a community where you don't have many independent physicians. Is a CIN really necessary? I would argue that it isn't. You don't have to create a whole separate legal structure if 90 or 95% of the physicians in your community are employed. There's just no reason to do it. You can create the clinically integrated structure, measuring quality, creating efficiencies, all of the infrastructure, even handling some of the funds flow and incentives. You can create those elements, those capabilities within your employed structure. So you don't necessarily have to create a whole separate entity, there's no real reason to do that. You also can do the contracting directly, either through the medical group on the professional side, or it can be integrated with the hospital. So, but if you have independence, and the independent physicians are important to your medical staff, are important to the patients in your community, to be able to create a clinically integrated network in such a way where you're supporting those independent physicians becomes really important. It does drive a lot of value. And I'll tell you, I have a place in my heart for independent physicians. I do a lot of work with independent physicians. I feel like the independent physician community is important to… to the whole healthcare ecosystem. And it does pain me a little bit to see that so many independent physicians have become employed. So when I work with an organization who does have a certain level of independent physicians, or in rural health communities, where there may be critical access hospitals, or physicians that exist in rural health settings. To be able to build a clinically integrated network that provides that infrastructure support in such a way that you're able to drive that support in the name of creating efficiencies, lowering cost and quality, is a huge value driver. It really does become important.

So, in thinking through that, well, where do you start? Well, it comes down to really 3 things. If you're an organization that's thinking about brand new… launching a brand new CIN, the first thing you have to do is start with the end in mind. What's the vision? Where do you want to go with this? What do you want to solve for? Are you solving for, maybe creating new value-based arrangements with your payers, that's a good reason of being able to do that. That may be the driving force. You may not be able to get additional fee-for-service rates, so you're going to have to incorporate value-based contracts in order to make sure you're getting the right economic, structure in place with your payers. So aligning around a value-based care payer strategy is important in driving the CIN, but it's not the only reason to do it. The second reason, which could be, you know, your primary driver for doing it, is really to create a stronger network, a stronger organized system of care within your community. Especially if you see… if you're in a competitive, maybe metropolitan area, and you're seeing independent physicians, splitting between your health system and another health system, you may want to create the integrated network in order to really build up what we call your network integrity, right? Leveraging or, let's say, maximizing the opportunities of your clinical services within your network. Your ancillary services, maybe your specialty services, services within the hospital, other services that would be important, maybe that you've invested in over time, but not fully able to utilize because, you know, of the competition. So, when you're establishing that network of care, that's a hhuge driver.

So, you know, again, I think as organizations are starting to build that initial clinical integrated network, establishing the vision and sort of asking or answering the question, why do it, is the first step. The second step is you have to define the value proposition. This really becomes important to the independent physicians. And it's really what I call the what's-in-it-for-me principle, right? So, when you have the independent physicians that are there, and maybe they're splitting their referrals between your system and another system. If you can define for them what's in it for them, what's the value, that, you know, for them to participate in your clinically integrated network, that's the first step in creating the alignment. So what's important to the independent physicians? Well, first and foremost, they want… they want some type of… of economic support, right? So…participating in the clinically integrated network, is it going to create more financial value? Maybe higher contracts, or contracted rates, or a additional revenue stream through your value-based agreements that you end up, undertaking? Or, in some cases, maybe it's the infrastructure costs. Maybe they need help with their analytics, or through the CIN, you can provide care management services, or improve documentation, whatever the case may be. So that's really the second thing, is defining that value proposition.

Third is, is to think about, who's… what's the impact to our patients and to our community? How do we advance the care and provide higher level care to our patients, to our community, by forming this clinically integrated network. And particularly for rural health communities, this third question is really so important, because in rural health, there's so many of the systems who are starting to cut care just because they just can't afford it. So, again, you know, providing that question around what it means to the community, what it means to the patient, you know, sort of rounds out that initial question. I believe in my experience in working with many organizations, if you can help to build the strategy around those three questions, again, establishing the vision, the what's in it for me principle, and then impact to the patients in the community, great way to be able to… to launch.

Daniel Marino: If you're just tuning in today, I'm Daniel Marino, you're listening to Value-Based Care Insights. I am sharing a lot of my experiences, in helping organizations around the country in establishing clinically integrated networks. And I just got done sharing some of my thoughts around launching an initial CIN.

So let's move to the second sort of tier of clinical integration that I see occurring with many organizations. And that's the organizations who've had a clinically integrated network for a number of years, but maybe are not performing as well as they should. And so the second group is really around optimizing your CIN. And what we often see in working with this organization is they're still managing the culture transformation between fee-for-service and fee-for-value. They haven't quite made that flip yet. And there's a number of reasons why they haven’t. Maybe they still have really good fee-for-service rates in the hospital, and they're not quite willing to give that up. Maybe they've not been able to negotiate the contracts and the value-based agreements with the payers in such a way that it's going to drive the success, or hasn't been able to drive the success that you really need to see in order to create the revenue to continue to grow and to fund the CIN. So, they're kind of limping along a little bit. What we are doing right now, and again, I think it's an interesting perspective, is we are creating these performance models. It's not rocket science, but what it's looking at is really aligning the core capabilities of the CIN, what they're good at, what they've been able to achieve, what they've been able to accomplish, and making sure it's aligned well with the contract. I'll tell you, when I work with many organizations, and we look at the type of value-based agreements that they have versus the capabilities. There is such a variance, such a gap between the contract and their performance, and what it tells me is that as we've started to negotiate this contract, you know, in most cases, it's the payers who are driving these elements. But there's no way that these organizations can be successful, because they've not been able to take the right steps in order to close the performance gap.

I'll give you an example. One of my clients, has been playing… has been within the Medicare Advantage space for quite some time, and they've started to now move into these risk-based agreements as part of their Medicare Advantage contracts, and they've done an excellent job on quality. They've hit their quality thresholds, and really have received performance dollars off of quality for probably the last 3 or 4 years, and are doing really well. But they are missing the financial opportunity or the incentives around hitting the total cost of care target. They've not been able to do it. And as an example for this particular organization. there's a… in the contract, the MLR, it's all based on the medical loss ratio, is sent at 86.5. For this organization, they're actually in the low 90s. They're around 93% to even 95% as an MLR, and they've been that way, and they've not been able to close that gap. So, you ask yourself, well, why haven't they been able to close that gap? Well, a number of reasons. They haven't been able to focus on the right things around utilization management. They haven't been able to focus around understanding the care around the right point of service, if you will. There's still a lot of care that's being done in the hospital and in the outpatient arena, less with ambulatory. And probably the third one, which is so telling, is that for this particular organization, they've not been able to properly risk stratify their population. So, when they think about where to really drive performance and create efficiencies, which… creating efficiencies is really what… what helps to, lead to the higher performance, reducing your total cost of care, reducing your MLR. You have to understand the patients who are really driving a majority of the cost, and that's really the rising risk population.

So…Risk stratifying along with understanding the utilization targets are really what's key. So, what we've been able to do for a lot of the organizations is create these performance models, and you're looking at a number of indicators that are driving the success. And in particular, it's understanding the utilization patterns, it's understanding, of these high-risk or rising-risk populations. What percentage is, is driving a lot of the costs, and then what can we do about it? How do we interact with incorporate care management? How do we put some indicators in place to really begin to bend the cost curve, if you will? The other key thing that becomes important with these organizations is really emphasizing network integrity, meaning reducing the leakage. Leakage is one of the biggest challenges for organizations, particularly large organizations that are in a competitive area. Mainly because when patients go to another organization or leak out of your network, your ability to influence the quality and control the costs goes down dramatically. And especially if you're in a global cap situation, you know, you're hit twice, right? Because not only is the patient leaking out of the system, and it potentially is impacting your global CAP structure, but you're also having to pay out, right? Related to that service. So, as we start to think about where patients are getting their care. Incorporating care management in such a way that we're able to, create efficiencies. Emphasize the need to keep patients in the system. Allow ourselves to really incorporate point-of-care, proactive services, for the patient is really what's going to drive those outcomes. And then, as we're starting to get more proficient, push back on the payers to say, look, you know, I can't have an 86.5% target in my MLR and go at risk, and I'm still at 93%, right? You have to create some type of a step down. But then it's the responsibility of the organization to make sure they're putting, you know, they have the path in place, and they understand what they need to do in order to drive down that MLR. Incorporate risk stratification, understand, you know, in some cases for Medicare Advantage, the RAF score and your HCC capture and recapture rate, understanding your utilization activity and some of the utilization trends, as well as quality. Obviously, that becomes really important.

So, let's talk now about the third one, the third CIN that's out there, and there's not many of them, but these are sort of the high-performing, clinically integrated networks that are out there, and these organizations have been fully committed to value-based care, they've been doing it for a while, they've made that shift, they've identified opportunities around efficiencies, improving or getting their total cost of care target to a reasonable rate. Many of these organizations, are in either risk-based models or assume some level of global cap. And it makes sense for them to do that. You know, when they're in a global cap, you're being paid a PMPM, and you're being asked to manage around it. And in an HMO population, it's easier to do because it creates more of a line structure with the patients. It's a little more difficult to do in a fee-for-service cap arrangement. So that's where a lot of the infrastructure comes into play. But for these organizations, They continue to ask themselves the question of how do we what's our driving force to get better? What's our driving force to continue moving the strategy forward? And typically, there's three, right? I talked about the first two when we launched a CIN, and that's really your value-based agreements. So, for a high-performing CIN, they want to continue to maximize their value-based agreements with the payer, and really shift into a proactive partnership with that payer.

Number two, they are continuing to leverage that network, and they have great performance outcomes, where, you know, only maybe 5 to, you know, 8% of the patients are leaking out of the system, they really watch and maintain, you know, not necessarily a closed network, but it's a semi-closed network, where you're making sure that the referrals are strong enough enough to… so you're really leveraging those internal services. So that network integrity, that network alignment, and the incentives around that are definitely in place. But the third element, which is a differentiator for high-performing versus the others, is growth. So they are focused on taking what they've built from this organized system of clinically integrated care, which they've done well, and they're using this to expand, to grow into new markets, to create a greater breadth of services. These are the organizations that are starting to enter into new markets, maybe going from metropolitan areas into the rural settings, or even, in some cases, going across state lines, and even leveraging themselves, building these population health service organizations, which are sort of MSOs for clinical integration or population health.

So these three become… these three drivers, if you will, are really what's important to making sure that the high-performing, clinically integrated network continues to advance. The other thing that we see with some of these high-performing, clinically integrated networks is they've also started to incorporate provider-sponsored health plans. So not only are they establishing the relationships with the payers and driving different types of contractual relationships with the payers. But they have, within their health systems, these provider-sponsored health plans, and they're creating specific products around that. Which, as you think about it. A clinically integrated network is really horizontal integration across the whole care continuum. When you start to introduce a provider-sponsored health plan into that equation, you're creating vertical integration. And what it allows for is the ability to create these narrow network products, maybe to differentiate the network into a high-performing network versus moderately performing network. But it allows also the provider-sponsored health plan to manage the premium structure within the community as a competitive factor with the commercial carriers that are out there. Now, of course, some of our commercial listeners may have some challenges with that, but nonetheless, it's the way for many high-performing organizations to continue to bend that cost curve.

So where do organizations go as they think about themselves within these three settings, right? Newly launched versus optimizing a CIN versus high-performing. Really ask yourselves the question of where you're at now and where do you want to go, right? Setting the vision becomes really important. And the other thing that I would emphasize, as a… as a recommendation is use your network and learn from other organizations across the country. There is no better way to advance your capabilities, to understand how you need to overcome some of these barriers and challenges. No better way than to network with your colleagues and learn the lessons that they've had, and really to drive some of that performance. As well as them being able to connect with some experts in the area. I think our listeners that have tuned in, happy to share a lot of our insights, a lot of our articles that I've written and some of my colleagues have written as well. And really, the bottom line is, as you begin to think through this, you have an ability to move very fast as you start to connect with some of those capabilities.

So, I would offer to many of our listeners today, share your thoughts, share your comments. If there are some questions that you have, oftentimes I'll post those questions on LinkedIn, with, you know, potentially my answer or recommendation, but I also connect it with other… with the community that we have, with other listeners, and it's a great way to expand your network and to get some other opinions or some other thoughts.

Lastly, I certainly would, would…encourage you to look on either the Lumina Insights page, it's lumina.com/insights for more information, or eCGMC.com. We have a lot of information on there. Or, again, look at some of these other organizations that have done a nice job on developing this. So I hope you found today's conversation informative. A little different than what we've done in the past, but I'm happy to share my insights. This is an area that I've enjoyed working in, and will continue to join… to enjoy working for many years to come. I'm passionate about this. And please, if there's any, conversations you want to have, any questions you may have, or any insights you want to hear, please reach out to me. I'm more than happy to jump on a 10 or 15 minute call, or…have a correspondence. That's how we all learn. So I want to thank all of you for tuning in today, and until our next Insights, I am Daniel Marino, bringing you 30 minutes of value to your day. Take care.

About Value-Based Care Insights Podcast

Value-Based Care Insights is a podcast that explores how to optimize the performance of programs to meet the demands of an increasingly value-based care payment environment. Hosted by Daniel J. Marino, the VBCI podcast highlights recognized experts in the field and within Lumina Health Partners