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The Franchise Model: An Emerging Strategy for Clinical Integration

Posted by Matthew Smith on Dec 3, 2013 4:38:00 PM
By Daniel J. Marino
President/CEO
Health Directions

Clinical Integration StrategyHealthcare reform is driving hospitals and physicians toward clinical integration. The goal is to use advanced care coordination strategies and information technology to improve population health outcomes and control spending.

  • One major challenge: Smaller community hospitals do not have the resources to build a clinical integration network on their own.
  • An emerging solution: Community hospitals nationwide are beginning to take advantage of the new “Franchise Model” for clinical integration.

Under this new model, a small hospital “purchases” a clinical integration infrastructure from a more sophisticated health system—much in the same way a local owner purchases a restaurant franchise from a national corporation.

The clinical integration Franchise Model allows community hospitals to reap the benefits of clinical integration without a major investment in clinical, technological and financial infrastructure.

How the Clinical Integration Franchise Model Works

Clinical Integration Franchise ModelTo create a clinically integrated network, providers must build an extensive infrastructure for making collaborative decisions, coordinating patient care, analyzing care metrics and negotiating value-based contracts. Under the clinical integration Franchise Model, a local “client” hospital contracts with an existing network for key components of a clinical integration infrastructure. Franchise components can include:

Governance Tools

Clinical integration networks spend a lot of time developing effective governance structures. These structures can be adopted by small clinical integration initiatives with some customization. Sharable resources include governance committee templates/processes and operating committee structures.

Clinical Programs

Many clinical care programs developed by large clinical integration networks can easily be adopted by client hospitals. Local clinical integration networks can purchase complete clinical program content—including care protocols, care tools, and clinical measures—for major diseases and population health goals.

Care Team Support

Successful clinical integration networks have developed extensive team resources for supporting care coordination, including nurse navigators, care coaches and patient engagement tools. This team infrastructure can easily be contracted out to client organizations.

Technology Infrastructure

Health IT represents a major investment in time and resources. Key components include care management tools and disease registries. Again, existing systems can be shared with partner organizations.

Stakeholder Engagement Tools

One major hurdle to clinical integration is engaging physicians. Local organizations can benefit greatly from access to structures for aligning physician incentives and coordinating medical services. Parent organizations can also provide sophisticated tools for educating and activating patients.

Contracting Resources

Under the clinical integration Franchise Model, parent networks can share advanced contracting resources with client hospitals, including financial models, value-based contract components and contracting language.

The starting point of a franchising partnership is to assign accountabilities. Design a “responsibility matrix” that outlines precisely what each party will bring to the table and what each can expect.

Typically, the local hospital pays an initial setup fee to the parent organization. The local clinical integration network then pays a monthly franchise fee. The local organization is responsible for all direct expenses from activities that support clinically integrated care at the local level.

Pros & Cons

The clinical integration Franchise Model gives small community hospitals access to a proven clinical integration infrastructure. Franchisees achieve “speed to market” and take advantage of economies of scale as they build on existing systems. Working with an experienced parent organization gives smaller organizations enhanced credibility with both physicians and payers.

Two potential downsides: First, franchisees may have a limited ability to customize certain content of clinical programs. Second, since there will be less need to engage with local physicians on clinical integration program development, there may be less of an opportunity to build a shared clinical integration culture.

Overall, though, the franchise model allows a community hospital to access sophisticated clinical integration resources while managing the clinical integration organization at a local level. This allows local hospitals and physicians to take part in clinical integration while remaining independent. It also lets both the parent organization and the community network leverage a larger footprint and organized system of care when negotiating contracts. 

 

Daniel J. Marino, CIN, Clinically Integrated Networks; As President/CEO of Health Directions, Daniel J. Marino shapes strategic initiatives for healthcare organizations and senior health care leaders in key areas such as population health management, clinical integration, physician alignment, and Health IT. With a broad background in all aspects of practice management and hospital/physician alignment, Dan is nationally recognized as a strategic leader in Accountable Care Organizations and clinical integration development. He frequently speaks at national conferences and regularly authors articles for the nation’s top healthcare industry publications related to current transformations in healthcare delivery. Dan may be reached via email at dmarino@healthdirections.com or by phone at 312-396-5400.

Clinical Integration, Health Directions, Collaboration

Topics: Clinical Integration, Daniel J. Marino, Franchise Model

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