Graham A. Brown, MPH, CRC, Vice President, and Marc Mertz, MHA, FACMPE, Vice President, GE Healthcare Camden Group
As organizations assess their capabilities, resources, and infrastructure to succeed in evolving value-based reimbursement structures, many health systems have begun to partner with other health systems in a manner that allows organizational independence but fosters collaboration in areas where synergies may exist, specifically around population health management.
The creation of super clinically integrated networks ("SCINs") reflects this trend. For some, these SCINs are merely a stepping stone to full integration or merger, but to most, these affiliations are viewed as a vehicle to strengthen each of the independent members by collectively joining forces to improve healthcare value.
These SCINs could have significant strategic potential if they are able to organize appropriately, prioritize initiatives, and advance to the level of jointly assuming risk, developing effective care models, and positioning the members as an attractive option to healthcare purchasers.
Often, SCINs embark on relatively low risk activities at the outset such as optimizing the supply chain, sharing services and overhead, sharing clinical knowledge around best practices, and improving patient access (particularly when organizations are in different markets).
While these may be reasonable starting points that help to garner trust and build momentum, they will not be solid long-term strategies on their own to support sustainability of the SCIN or lead to return on investment for its members.
Establishing goals and objectives of the SCIN at the outset with cohesive strategy formulation and buy-in, as well as ensuring that it is properly resourced, will be integral to their success.
As mentioned, most SCINs that have been formed have a goal of developing joint population health management infrastructure. Defining exactly what this means and responsibilities of the SCIN versus responsibilities of each individual member is a key initial step.
Certainly, there is extensive cost associated with developing the proper infrastructure to support population health. Thus, the economic opportunities to the SCIN should be evident when compared to resourcing population health initiatives as individual organizations.
Ultimately, as the population health infrastructure is built and care model effectuated, there are many opportunities to better manage care and impact overall value. Many SCINs endeavor to offer an attractive, efficient delivery network to self-funded employers via direct to employer contracting; and this activity often begins with their own collective employee health benefits programs. More advanced SCINs progress to joint payer contracting but will need to have achieved clinical and/or financial integration to an acceptable level.
Shifting of financial risk from major payers to the SCIN through a plan-to-plan type arrangement or global capitation are other alternatives as the SCIN evolves and is better equipped to manage risk. Further, the individual exchange marketplaces and Small Business Health Options Program (“SHOP”) allow these advanced delivery networks to access individuals and small groups in an efficient manner and compete more quickly with larger carriers.
Depending on the overall goals, objectives, market characteristics, and current capabilities of each individual member and the SCIN, a provider sponsored health plan may be another opportunity to consider. Between 2012 and 2015, 54 percent of the new Medicare Advantage plan entrants were provider owned.
There is great risk in starting a health plan, but sharing this risk across organizations in the SCIN could be a mechanism to diffuse risk and share collective resources. Additionally, the mere scale in size of the SCIN provides a larger pool of lives than any individual system would have on its own. While the task seem to daunting, particularly at a time when the healthcare system is changing rapidly, embarking on these initiatives collectively may prove to be the best strategy.
There is significant opportunity for super clinical integrated networks to chart their own path and truly transform the delivery system in a positive manner. However, coordinating efforts across multiple large organizations that remain independent is not without its challenges.
Starting with the basics is a reasonable first step so long as there is a well thought out strategy and plan to more fully develop the organization to its potential.
Each individual organization will have its separate priorities. Determining how the SCIN moves forward as “one” while supporting the independence and priorities of the individual organizations will be key to their success.
An effectively designed governance structure of the SCIN that includes the chief executive officer of each member, along with one other key leadership position, is recommended. This will allow nimbleness of the SCIN in decision-making, but will also foster effective communication and alignment of strategies.
Those organizations that can pull it all together could easily set themselves apart and have significant strategic advantage in their respective market(s). Developing a detailed strategic framework for the SCIN that all parties support and holding each other accountable will serve as a foundation of success for these organizations.
Mr. Brown is a vice president and clinical integration practice leader with GE Healthcare Camden Group and has over 25 years of experience in the areas of payer negotiations, program administration, and change management with healthcare provider, payer, government, and human service clients. He is an experienced leader in business planning and implementation for clinical integration and accountable care organization development across the U.S. He may be reached at email@example.com.
Mr. Mertz is a vice president with GE Healthcare Camden Group and has 18 years of healthcare management experience. He has 15 years of experience in medical group development and management, physician-hospital alignment strategies, physician practice operational improvement, practice mergers and acquisitions, medical group governance and organizational design, clinical integration, and physician compensation plan design. He may be reached at firstname.lastname@example.org.
This article was originally published by Modern Healthcare Executive, November 27, 2015