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GE Healthcare Camden Group Insights Blog

 3 Important Considerations for Funding Your Clinical Integration Project

Posted by Matthew Smith on Sep 15, 2015 1:58:54 PM

By Daniel J. Marino, MBA, MHA, Executive Vice President, GE Healthcare Camden Group

Healthcare leaders are asking some serious questions about clinical integration. How much will it cost to develop a clinically integrated network ("CIN")? How and when will the CIN begin paying for itself?

Here are answers to three important questions about the economics of clinical integration.

Q. What Initial Investment Will Clinical Integration Require?

The upfront investment depends on the resources each participant can contribute to the network. The initial primary cost drivers of a CIN are information technology, professional and legal support, and staffing. The good news is that all three cost components can usually be managed within the available resources of the hospital partner.

Based on the work The Camden Group is doing with clients, new CINs typically require $500,000 to $3 million in investment capital. This money funds the network build and launch over a two- to three-year period.

Q. What is the Net Impact of Clinical Integration?

Leading organizations are developing CINs with the idea that they will not achieve true return on investment until two or three years down the road. The sooner a CIN can manage population health and build an organized system of care, the sooner it will realize a net positive return. Two areas are key:

Network Impact

The CIN as a whole should focus on securing incentive payments. These include incentives tied to reducing the cost of care and meeting/exceeding quality thresholds under value-based and risk-based contracts. Networks can also pursue employer contracts that provide care management fees and revenue from employee health outreach, wellness, and prevention services.

Participant Impact

Hospitals and physicians that participate in a CIN can expect a positive impact within their separate operations.

  • As network-driven care matures, patient outmigration (commonly referred to as patient leakage) outside the CIN should decrease by 10 percent to 15 percent. Hospitals will see their utilization increase, even though typical indicators such as length-of-stay and readmissions will decrease.
  • Many CINs begin by enrolling the hospital’s self-insured employed population. These hospitals will see a decrease in their variable employee costs and a decline in overall spending per employee per year.
  • Integration will also complement a hospital’s internal quality improvement initiatives. Hospitals that participate in a CIN will have a greater ability to bend the cost curve, achieve quality targets, and improve patient access.
  • Physicians have the opportunity to receive performance incentives in the form of shared savings distributions. Medical providers should also see a stabilization and eventual increase in their practice population, resulting in stronger practice revenue.
Q. What is the Financial Value of Clinical Integration?

Ultimately, CINs need to look beyond short-term incentives and start developing the ability to assume financial risk for groups of beneficiaries.

Payers are beginning to offer complementary insurance products that leverage population health management. These payers need high-performing CINs that:

  • Deliver a strong network of providers focused around organized care principles
  • Demonstrate the ability to drive down costs for high-risk population cohorts
  • Incorporate care coordination functions that result in high-quality care outcomes

CINs that can deliver on these points will build undisputed financial value, giving them a commanding position within emerging provider/payer partnerships.

Start with a Financial Model

Will your CIN be economically viable? The answer depends on many variables, including market forces and assumptions inherent in population health management.

The first step for any new CIN is careful financial modeling. Successful CINs get a fast start by building sophisticated financial models that take into account changing conditions and sensitivity analyses. These models help CINs build strong provider networks, align participants with a population health vision, maximize their net economic impact, and create true financial value. 

Clinical Integration Networks, CIN, Daniel J. Marino


Mr. Marino is an executive vice president with GE HealthcareCamden Group with more than 25 years of experience in the healthcare field. Mr. Marino specializes in shaping strategic initiatives for healthcare organizations and senior healthcare leaders in key areas such as population health management, clinical integration, physician alignment, and health information technology. He may be reached at [email protected]

 

 

Topics: Clinically Integrated Care, Funding Clinical Integration, Clinically Integrated Network, Daniel J. Marino, Funding CINs

Funding Your Clinical Integration Project: 3 Important Considerations

Posted by Matthew Smith on Oct 29, 2014 1:05:00 PM
By Daniel J. Marino
President/CEO, Health Directions

Clinical Integration, Funding, Population healthHealthcare leaders are asking some serious questions about Clinical Integration. How much will it cost to develop a Clinically Integrated Network? How and when will the Clinically Integrated Network begin paying for itself?

Here are answers to three important questions about the economics of Clinical Integration.

Q. What Initial Investment Will Clinical Integration Require?

The upfront investment depends on the resources each participant can contribute to the network. The initial primary cost drivers of a Clinically Integrated Network are information technology, professional and legal support, and staffing. The good news is that all three cost components can usually be managed within the available resources of the hospital partner.

Based on the work Health Directions is doing with clients, new Clinically Integrated Networks typically require $500,000 to $3 million in investment capital. This money funds the network build and launch over a 2- to 3-year period.

Q. What is the Net Impact of Clinical Integration?

Leading organizations are developing Clinically Integrated Networks with the idea that they will not achieve true ROI until 2 or 3 years down the road. The sooner a Clinically Integrated Network can manage population health and build an organized system of care, the sooner it will realize a net positive return. Two areas are key:

Network impact

The Clinically Integrated Network as a whole should focus on securing incentive payments. These include incentives tied to reducing the cost of care and meeting/exceeding quality thresholds under value-based and risk-based contracts. Networks can also pursue employer contracts that provide care management fees and revenue from employee health outreach, wellness and prevention services.

Participant impact

Hospitals and physicians that participate in a Clinically Integrated Network can expect a positive impact within their separate operations.

  • As network-driven care matures, “leakage” of patients outside the Clinically Integrated Network should decrease by 10% to 15%. Hospitals will see their utilization increase, even though typical indicators such as length of stay and readmissions will decrease.
  • Many Clinically Integrated Networks begin by enrolling the hospital’s self-insured employed population. These hospitals will see a decrease in their variable employee costs and a decline in overall spending per employee per year.
  • Integration will also complement a hospital’s internal quality improvement initiatives. Hospitals that participate in a Clinically Integrated Network will have a greater ability to bend the cost curve, achieve quality targets and improve patient access.
  • Physicians have the opportunity to receive performance incentives in the form of shared savings distributions. Medical providers should also see a stabilization and eventual increase in their practice population, resulting in stronger practice revenue.

Q. What is the Financial Value of Clinical Integration?

Ultimately, Clinically Integrated Networks need to look beyond short-term incentives and start developing the ability to assume financial risk for groups of beneficiaries.

Payers are beginning to offer complementary insurance products that leverage population health management. These payers need high-performing Clinically Integrated Networks that:

  • Deliver a strong network of providers focused around organized care principles
  • Demonstrate the ability to drive down costs for high-risk population cohorts
  • Incorporate care coordination functions that result in high-quality care outcomes

Clinically Integrated Networks that can deliver on these points will build undisputed financial value, giving them a commanding position within emerging provider/payer partnerships.

Start with a financial model

Will your Clinically Integrated Network be economically viable? The answer depends on many variables, including market forces and assumptions inherent in population health management.

The first step for any new Clinically Integrated Network is careful financial modeling. Health Directions helps client Clinically Integrated Networks get a fast start by building sophisticated financial models that take into account changing conditions and sensitivity analyses. These models help Clinically Integrated Networks build strong provider networks, align participants with a population health vision, maximize their net economic impact and create true financial value. 

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___________________________________________________________________

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 [email protected] or by phone at 312-396-5400.

Topics: Clinical Integration, Population Health, Hospitals, Clinically Integrated Networks, Funding Clinical Integration, Daniel J. Marino

Funding Clinical Integration: 3 Essential Questions to Ask

Posted by Matthew Smith on Mar 26, 2014 1:50:00 PM

Funding, Clinical IntegrationHealthcare leaders are asking some serious questions about Clinical Integration. How much will it cost to develop a Clinically Integrated Network? How and when will the Clinically Integrated Network begin paying for itself?

Here are answers to three important questions about the economics of Clinical Integration.

Q. What Initial Investment Will Clinical Integration Require?

The upfront investment depends on the resources each participant can contribute to the network. The initial primary cost drivers of a Clinically Integrated Network are information technology, professional and legal support, and staffing. The good news is that all three cost components can usually be managed within the available resources of the hospital partner.

Based on the work Health Directions is doing with clients, new Clinically Integrated Networks typically require $500,000 to $3 million in investment capital. This money funds the network build and launch over a 2- to 3-year period.

Q. What is the Net Impact of Clinical Integration?

Leading organizations are developing Clinically Integrated Networks with the idea that they will not achieve true ROI until 2 or 3 years down the road. The sooner a Clinically Integrated Network can manage population health and build an organized system of care, the sooner it will realize a net positive return. Two areas are key:

Network impact

The Clinically Integrated Network as a whole should focus on securing incentive payments. These include incentives tied to reducing the cost of care and meeting/exceeding quality thresholds under value-based and risk-based contracts. Networks can also pursue employer contracts that provide care management fees and revenue from employee health outreach, wellness and prevention services.

Participant impact

Hospitals and physicians that participate in a Clinically Integrated Network can expect a positive impact within their separate operations.

  • As network-driven care matures, “leakage” of patients outside the Clinically Integrated Network should decrease by 10% to 15%. Hospitals will see their utilization increase, even though typical indicators such as length of stay and readmissions will decrease.
  • Many Clinically Integrated Networks begin by enrolling the hospital’s self-insured employed population. These hospitals will see a decrease in their variable employee costs and a decline in overall spending per employee per year.
  • Integration will also complement a hospital’s internal quality improvement initiatives. Hospitals that participate in a Clinically Integrated Network will have a greater ability to bend the cost curve, achieve quality targets and improve patient access.
  • Physicians have the opportunity to receive performance incentives in the form of shared savings distributions. Medical providers should also see a stabilization and eventual increase in their practice population, resulting in stronger practice revenue.

Q. What is the Financial Value of Clinical Integration?

Ultimately, Clinically Integrated Networks need to look beyond short-term incentives and start developing the ability to assume financial risk for groups of beneficiaries.

Payers are beginning to offer complementary insurance products that leverage population health management. These payers need high-performing Clinically Integrated Networks that:

  • Deliver a strong network of providers focused around organized care principles
  • Demonstrate the ability to drive down costs for high-risk population cohorts
  • Incorporate care coordination functions that result in high-quality care outcomes

Clinically Integrated Networks that can deliver on these points will build undisputed financial value, giving them a commanding position within emerging provider/payer partnerships.

Start with a financial model

Will your Clinically Integrated Network be economically viable? The answer depends on many variables, including market forces and assumptions inherent in population health management.

The first step for any new Clinically Integrated Network is careful financial modeling. Health Directions helps client Clinically Integrated Networks get a fast start by building sophisticated financial models that take into account changing conditions and sensitivity analyses. These models help Clinically Integrated Networks build strong provider networks, align participants with a population health vision, maximize their net economic impact and create true financial value. 

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 [email protected] or by phone at 312-396-5400.

FAQ_Button_Orange.png

Topics: Clinical Integration, Population Health, Hospitals, Clinically Integrated Networks, Funding Clinical Integration, Daniel J. Marino

Six Clinical Integration Articles Now Available as PDF Downloads

Posted by Matthew Smith on Feb 20, 2014 1:18:00 PM

Clinical Integration, Health DirectionsAs part of our ongoing commitment to our clients, social media followers, and the healthcare industry, Health Directions authors original content that is published regularly in national publications as well as on our HD Insights Blog. We create this content to educate and inform, as well as stimulate important conversation around these key topics. 

You may have read one, or all, of these articles, but we've re-packaged them for you into individual PDFs that may be downloaded and printed out at your convenience.

We hope that you receive some valuable insight from these articles and invite you to subscribe to the HD Insights Blog and comment on the articles in the Comments section, below. 

To download each article, simply click on the respective button which will automatically direct you to an online PDF. To download, right click on the page and save to your device.

Clinical Integration, Health Directions, Population HealthFunding Clinical Integration, Population Health, Health Directions

Clinical Integration, Health Directions, Population Health, Regional Clinically Integrated Networks, CINs, Health Directions, Population Health, Clinical Integration

Clinical Integration, Hospital-Physician CollaborationClinical Integration, Franchise Model, Health Directions

 

HD Insights Blog, Health Directions, Blog Subscription 

Topics: Clinical Integration, Funding Clinical Integration, Enlisting Physicians, Regional CINs, Hospital-Physician Collaboration, Clinical Integration Franchise Model

Asked & Answered: 3 Questions About Funding Clinical Integration

Posted by Matthew Smith on Jan 27, 2014 4:32:00 PM
By Daniel J. Marino
President/CEO
Health Directions

Funding Clinical IntegrationHealthcare leaders are asking some serious questions about Clinical Integration. How much will it cost to develop a Clinically Integrated Network? How and when will the Clinically Integrated Network begin paying for itself?

Here are answers to three important questions about the economics of Clinical Integration.

Q. What Initial Investment Will Clinical Integration Require?

The upfront investment depends on the resources each participant can contribute to the network. The initial primary cost drivers of a Clinically Integrated Network are information technology, professional and legal support, and staffing. The good news is that all three cost components can usually be managed within the available resources of the hospital partner.

Based on the work Health Directions is doing with clients, new Clinically Integrated Networks typically require $500,000 to $3 million in investment capital. This money funds the network build and launch over a 2- to 3-year period.

Q. What is the Net Impact of Clinical Integration?

Leading organizations are developing Clinically Integrated Networks with the idea that they will not achieve true ROI until 2 or 3 years down the road. The sooner a Clinically Integrated Network can manage population health and build an organized system of care, the sooner it will realize a net positive return. Two areas are key:

Network impact

The Clinically Integrated Network as a whole should focus on securing incentive payments. These include incentives tied to reducing the cost of care and meeting/exceeding quality thresholds under value-based and risk-based contracts. Networks can also pursue employer contracts that provide care management fees and revenue from employee health outreach, wellness and prevention services.

Participant impact

Hospitals and physicians that participate in a Clinically Integrated Network can expect a positive impact within their separate operations.

  • As network-driven care matures, “leakage” of patients outside the Clinically Integrated Network should decrease by 10% to 15%. Hospitals will see their utilization increase, even though typical indicators such as length of stay and readmissions will decrease.
  • Many Clinically Integrated Networks begin by enrolling the hospital’s self-insured employed population. These hospitals will see a decrease in their variable employee costs and a decline in overall spending per employee per year.
  • Integration will also complement a hospital’s internal quality improvement initiatives. Hospitals that participate in a Clinically Integrated Network will have a greater ability to bend the cost curve, achieve quality targets and improve patient access.
  • Physicians have the opportunity to receive performance incentives in the form of shared savings distributions. Medical providers should also see a stabilization and eventual increase in their practice population, resulting in stronger practice revenue.

Q. What is the Financial Value of Clinical Integration?

Ultimately, Clinically Integrated Networks need to look beyond short-term incentives and start developing the ability to assume financial risk for groups of beneficiaries.

Payers are beginning to offer complementary insurance products that leverage population health management. These payers need high-performing Clinically Integrated Networks that:

  • Deliver a strong network of providers focused around organized care principles
  • Demonstrate the ability to drive down costs for high-risk population cohorts
  • Incorporate care coordination functions that result in high-quality care outcomes

Clinically Integrated Networks that can deliver on these points will build undisputed financial value, giving them a commanding position within emerging provider/payer partnerships.

Start with a financial model

Will your Clinically Integrated Network be economically viable? The answer depends on many variables, including market forces and assumptions inherent in population health management.

The first step for any new Clinically Integrated Network is careful financial modeling. Health Directions helps client Clinically Integrated Networks get a fast start by building sophisticated financial models that take into account changing conditions and sensitivity analyses. These models help Clinically Integrated Networks build strong provider networks, align participants with a population health vision, maximize their net economic impact and create true financial value. 

 

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 [email protected] or by phone at 312-396-5400.

 

Clinical Integration, Health Directions, Clinically Integrated Network

Topics: Clinical Integration, Population Health, Hospitals, Clinically Integrated Networks, Funding Clinical Integration, Daniel J. Marino

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