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5 Incentives for Enlisting Physicians into a Clinical Integration Program

Posted by Matthew Smith on Oct 21, 2013 11:25:00 AM
By William K. Faber, MD, MHCM
Chief Medical Officer
Health Directions

physician, clinical integration, population healthClinical Integration programs unite physicians for the purpose of delivering higher quality health outcomes. Payers in certain markets reward systems with Clinical Integration programs due to the savings created by better population health management. Physicians are sometimes reluctant to join Clinical Integration programs and appropriately ask “What’s in it for me?”  This article discusses various rationales and motivators that may be useful in the recruitment of physician participants.

The Monetary Incentive

Architects of Clinical Integration programs must ensure that a significant percentage of the financial reward for better quality health outcomes is passed on to the providers who produce those outcomes. It is not uncommon for individual physicians in mature Clinical Integration programs to receive tens of thousands of dollars per year in bonus payments for their performance. This is a significant amount for primary care physicians who drive much of the success of Clinical Integration programs. The monetary pool increases in size as systems add payer contracts that reward performance and savings. The leverage of the system to negotiate such contracts increases with the progressive ability of the Clinical Integration program to manage population health. Remind physicians that a Clinical Integration Program will financially reward them for their efforts.

The Quality Incentive

Physicians and health care providers feel good about improving the health of their patients. Studies show that financial rewards are not at the top of the list of reasons people choose and stick with their jobs. It is often difficult, however, for a provider to really know how much their patients are being helped by their efforts. Clinical Integration programs objectively measure health outcomes and provide feedback to providers about specific patients and their entire population of certain kinds of patients. This specific information lets the physicians know which patients need most need help and which ones are actually responding to therapy. Knowing a patient is improving by objective measurement is much more satisfying to providers than subjective estimates of improvement. Remind physicians that a Clinical Integration Program will improve the lives of their patients.

The Competitive Incentive

Physicians are competitive by nature. Competition got them into and through medical school and the vast majority of physicians are committed to ongoing personal improvement. They also like to be right, and know that they are up to date in their professional knowledge of best clinical practices. Clinical Integration programs are charged with selecting the best, nationally vetted, evidence-based measures upon which to measure performance. Clinical Integration programs provide performance feedback that allows physicians to see how they compare with their colleagues, and they in advanced Clinical Integration programs, physicians often elect to become completely transparent with their results, spurring competition and performance further. Remind physicians that a Clinical Integration program supports self-improvement.

The Work-life Balance Incentive

High on the list of factors that lead to professional satisfaction and retention is work-home life balance. Physicians often work 60-hour weeks and come home exhausted. They run so far behind that they cannot imagine taking on additional patients and getting home later at night. Because Clinical Integration programs are rewarded for quality outcomes and value creation (not just more activity), they can supplement the income of participating physicians by providing more efficient care. Examples would be providing more care via the phone and Internet, allowing each member of the office team to work to the top of their license and using Care Managers to support patients in ways physicians often did before. Because Access is critical to program success, Clinical Integration programs invest in office process improvement activities, such as learning collaboratives. Remind physicians that a Clinical Integration Program supports office efficiency so they can spend more of their time doing what physicians find rewarding.

The Survival Incentive

Depending on the progressiveness of the payer environment and local responses to ACA reform initiatives, physicians may believe that payment for value, in its various forms, will soon be at their doorstep. Even if payers are not currently rewarding Clinical Integration, systems are wise to start now to create the infrastructure to provide greater value. Clinical Integration programs require policy and procedural changes, IT integration, measures selection, incentive design and culture changes that do not occur over night. It takes several years to mature a Clinical Integration program to provide significant value to the payers. Systems that have not developed Clinical Integration capabilities will find themselves competitively disadvantaged on the day payment methodologies change. The survival of physician practices is increasingly dependent on the strength of the systems to which they belong. Remind physicians that a Clinical Integration program will position their system for success in emerging payment methods.


Payers in many markets already reward population health quality improvement, and health care reform and employer pressures will surely increase this trend. Clinical Integration programs effectively support these outcomes, but they must not integrate physicians in name only. These programs cannot function without robust physician engagement. Physician perception that the financial rewards of population health improvement are shared fairly with them is crucial, but physician engagement can be further enhanced by reminding them of the other benefits of membership.


About the Author

William K. Faber, MD Health DirectionsDr. William K. Faber, Chief Medical Officer for Health Directions, is a physician executive with progressive senior leadership experience. He most recently served as Senior Vice President of the Rochester General Health System in New York, where he guided the development of the system’s Clinical Integration program and assisted more than 150 providers at 44 sites through the conversion process from paper records to an Electronic Health Records system (Epic). Dr. Faber formerly participated in the governance of the Advocate Physician Partners (APP) Clinical Integration program and directed APP’s Quality Improvement Collaborative.


Clinical Integration, Health Directions

Topics: Clinical Integration, Clinically Integrated Care, Four Pillars, 4 Pillars, Technology Infrastructure, Clinical Programs, Aligned Incentives, Collaborative Leadership

7 Tips for Partnering with Physicians to Achieve Clinical Integration

Posted by Matthew Smith on Oct 8, 2013 3:57:00 PM

Clinical Integration, Clinically Integrated Care, Population HealthNew payment models are making it more important than ever for hospitals to collaborate with physicians. From readmission penalties to bundled payments to ACOs, providers have a growing economic incentive to pool resources, share information, coordinate care and services and cooperate on quality improvement. 

But while the incentives are strong, the obstacles to clinical integration are daunting. Hospital-physician collaboration is operationally complex. Although physician employment can smooth out some of the bumps, practice acquisition is expensive. While a handful of large health systems have devoted extensive resources to launching clinical integration initiatives, most smaller organizations are still sorting out their options.

How can hospitals integrate with physicians without creating political and financial problems? The solution is to focus on building mutually beneficial relationships and use existing resources wisely.

The following practical approach will help healthcare leaders achieve clinical integration by engaging physicians, strategizing collaborative programs and making targeted investments.

1. Understand Physician Motivation

Convincing physicians to collaborate more closely with a hospital can be challenging. Physicians are trained as autonomous decision makers. Perfectionism and the need for control can make it difficult to weave physicians into an integrated organization. But there is a positive side to the medical personality: No doctor wants to be an outlier.

Engage physicians by presenting data on their patient outcomes. Most physicians will discover at least a few areas in which their performance falls short of their peers.

Talk to doctors about their patients’ flu vaccination rates, medication reconciliation rates, performance on diabetes control measures, etc. This is easiest for hospitals that have access to physician claims data through a physician-hospital organization (PHO) or that offer physicians a subsidized electronic medical record (EMR) with built-in Clinical Quality Measure (CQM) templates that facilitate reporting.

Most physicians do not track and evaluate their own performance, let alone measure their performance against peers. Relevant patient statistics will earn physicians’ attention and generate interest in working more closely with hospital staff to improve outcomes.

It is also important to educate physicians on the evolving healthcare market. Explain how payers are creating incentives for clinical integration though bundled or global payments and per patient/per month care coordination fees. As physicians become more aware of these payment trends, many will embrace the opportunity to increase their salary by partnering with the hospital.

2. Create True Physician Governance

To gain the most under new payment models, physicians and hospitals have to play nice in the sandbox. The key is establishing a governance body that allows physicians to guide the development of care strategies and clinical protocols. Physician-led governance will create physician awareness and support for clinical integration initiatives and make a positive impact on the overall success of the program. Make sure the clinical integration governance committee includes physicians from solo practices and small partnerships as well as large groups. Include representatives from a range of specialties.

Most important, the governance body should include physicians who are critical or even negative about the clinical integration initiative. Often these “difficult” physicians simply want to be heard and provide their input. Making these physicians feel included will go a long way toward smoothing the transition to integration.

3. Focus on Quality, Not Finances

Physicians are concerned about productivity and payment, but concentrating exclusively on financial metrics will disenchant many providers. Focus instead on clinical quality and performance improvement. After all, this is the main reason physicians entered medicine — to provide quality care to the patients they serve.

The clinical integration committee should establish quality benchmarks and treatment protocols that define performance standards. Benchmarks can be based on evidence-based standards and care plans developed by national quality organizations and disease associations. Micromanaging clinical decisions will be unpopular, so care protocols should be broad guidelines that allow room for individual judgment.

To choose initial improvement goals, review admission and inpatient reports to identify areas of low quality and high cost. For which conditions does the hospital see the greatest number of admissions? Which conditions have the longest length of stay? Physicians using an EMR may be able to report on certain quality measures. For example, what is the percentage of hypertensive patients with adequate blood pressure control? How many heart disease patients have an up-to-date lipid profile?

Begin the clinical integration outreach with physicians in specialties linked to poorer outcomes and higher costs. Another logical starting point is primary care. Family practice physicians and internists often have the greatest impact on chronic disease management.

4. Concentrate on Care Coordination

One of the biggest opportunities in clinical integration is better coordination of care. Focus on high- and medium-risk patients who are responsible for the highest costs or who will likely increase costs in the near future. Target care transitions between the hospital and admitting specialists or primary care physicians. Involve physical therapy, home health providers and long-term care facilities in clinical coordination planning.

Physicians need to ensure that discharged patients complete follow-up visits. The hospital can assist by sponsoring a care coordination team for the entire organization to help manage follow-up appointments, referrals and home health services. To help guide care coordination, stratify hospital discharges by risk of readmission, complication or care plan non-compliance.

5. Use Technology to Get Providers Talking

Clinical integration is nearly impossible without an EMR system, but many medical practices are not far along in EMR adoption. Most practices cite expense as the main obstacle.

To overcome the cost hurdle, consider subsidizing EMR systems for practices that agree to join the integrated organization. Relaxation of the Stark laws allows hospitals to subsidize as much as 85 percent of the purchase and support costs of an EMR system. Subsidy agreements can require physicians to report quality measures and meet quality performance thresholds.

However, do not expect physicians to acquire the same EMR system as the hospital. Many small practices can do very well with free and low-cost alternative systems. The hospital should build interfaces for exchanging information with the EMR systems used by the majority of integrated physicians.

Many physicians who have implemented EMRs have participated in the Medicare and Medicaid EHR Incentive Program. As part of demonstrating Meaningful Use under the program, these physicians have already begun tracking clinical quality measures. Clinically integrated organizations should use the EMR to create aggregated quality reports and share them with physicians. Weekly or monthly reports can track disease management data such as HbA1c levels, cholesterol, blood pressure and preventive screenings. Giving physicians the chance to view quality performance metrics will engage both their competitive personalities and their collaborative spirit.

6. Build Financial Incentives

Clinical integration will require physicians to invest time and money into patient education, technology and additional staff. The problem is that methods of compensating providers for care coordination are still being developed and tested by payers. Given the costs being shouldered by physicians, financial incentives are critical.

Regardless of how incentives are distributed, hospital leaders should reward physicians either for controlling costs, achieving quality benchmarks or both. Focus on achieving care management quality metrics early on, since reduced costs tend to follow well-managed patients. Establish and re-assess these performance targets annually.

One important note: Make sure primary care physicians get a piece of the pie. Although surgical specialists might be responsible for most of the hospital’s costs and revenue, primary care doctors have the most frequent patient contact and are also responsible for most of the work of chronic disease management.

7. Invest Early for Healthy Returns

Even hospitals without the resources of a large medical system can achieve clinical integration by focusing on strategic investment and engaging community physicians through quality improvement. Hospital leaders need to allow physicians to establish the quality benchmarks and evidence-based protocols for the organization’s costliest conditions. Leaders can then concentrate on linking doctors through technology, assisting with care coordination, and negotiating with payers on bundled payments or pay-for-performance incentives.

Clinical Integration, Health Directions

Topics: Clinical Integration, Clinically Integrated Care, Four Pillars, 4 Pillars, Technology Infrastructure, Clinical Programs, Aligned Incentives, Collaborative Leadership

The Path to Clinical Integration: The Four Pillars Strategy

Posted by Matthew Smith on Aug 12, 2013 2:37:00 PM

By Health Directions President & CEO Daniel J. Marino. 

4 Pillars of Clinical IntegrationGovernment and private insurers are gradually moving away from encounter-based reimbursement and rapidly developing new payment models that reward coordination of care and population health management. How should healthcare leaders respond? As always, there are options. 

The first option is to do nothing. Both hospitals and physicians can maintain current strategies based on fee-for-service payment, avoid the up-front costs of care coordination — and tolerate declining reimbursement. Physicians will take home less pay, and hospitals will see their margins shrink. 

The next option for hospitals and physicians is to work on improving care coordination, but within their respective silos. A hospital could use quality methodologies and technological tools to improve coordination of inpatient care. A physician group could develop a medical home model to coordinate care within its practice population. "Siloed coordination" will enable each party to leverage gains in payor contracting. Hospitals will be able to point to cost reductions, and physicians will be able to tout better chronic disease outcomes. The problem is that neither the hospital nor the physicians will realize the benefits of fully coordinated patient care. Their opportunities for success under value-based contracting models will be limited. 

That brings us to the last option: clinical integration between hospitals and physicians. Clinical integration offers both parties the opportunity to coordinate patient interventions, manage quality across the continuum of care, move toward population health management and pursue true value-based contracting.  

Unfortunately, the path to clinical integration is far from clear. The best strategy is to build a platform for hospital-physician collaboration that is flexible enough to support a broad range of possible futures. Right now, leading healthcare organizations are creating this versatile platform by focusing on the four "pillars" of clinical integration.

4 Pillars of Clinical Integration1. Collaborative Leadership

The first pillar of clinical integration is a shared governance body with strong physician leadership. Getting governance right is critical for three reasons.

First, if a clinical integration initiative will include independent physicians, it needs to have a legal structure for contracting with payors and, in turn, paying physicians based on outcomes, not referrals. To be acceptable under Federal Trade Commission standards, a clinically integrated organization must be an independently governed entity with the objective of improving population health through coordinated programs and interventions. 

Second, clinical integration requires collaboration on payor strategy. The scope goes beyond the typical Physician-Hospital Organization. The focus is on achieving clinical outcomes that can serve as value drivers within risk-based and pay-for-performance contracting models. Only a strong physician-led governance body will be able to create the clinical strategies required to pursue risk-based or value-based contracts with commercial payors, develop innovative care contracts with employers and take advantage of accountable care opportunities in the Medicare Shared Savings Program. 

Third, clinical integration requires a strong physician-led governing structure for driving cultural change. For a clinically integrated organization to be successful, physicians must transition away from the fee-for-service mindset. This includes adopting new behaviors that align with outcomes-based reimbursement, such as collaborating across specialties, sharing information, managing utilization and providing proactive care. Educating providers on clinical integration concepts, including innovative care delivery models and tracking of clinical quality outcomes, is what allows community physician members to understand the value of participation.

2. Aligned Incentives

Hospitals and physicians share many goals, but their priorities often diverge. It is essential that clinically integrated organizations develop structures that align goals and incentives across the entire spectrum of providers. 

Clearly, physician compensation is an important tool. Clinically integrated organizations must design incentive plans that not only encourage productivity, but reward physician efforts to achieve shared goals in care, quality and cost control. 

But compensation design is not enough to ensure strong performance. Organizations need to create support structures to help physicians understand and work toward performance objectives:

  • Develop a plan for communicating strategies and decisions to the entire organization.
  • Assign staff and resources to physician education and office staff training.
  • Develop a provider scorecard that keeps physicians oriented toward improving clinical outcomes and controlling costs.

Supporting all of these efforts, leaders need to build a financial infrastructure to guide overall decision making. One key priority is to develop a risk-based cost model that links patient care costs to interventions and quality outcomes. Finance leaders will also need to begin engaging with payors to explore and negotiate risk-based contracts and develop a physician performance incentive fund. 

3. Clinical Programs

The heart of clinical integration is care coordination. Greater coordination between providers will improve patient outcomes and wring costs out of the system by optimizing care transitions, reducing redundant testing and providing better management of patients with multiple complex co-morbidities and diagnoses.

To launch a care coordination strategy, begin by creating clinical programs that target major opportunities in care improvement. Initial areas of concentration may include:

  • High-risk patients (for example, diabetics with multiple co-morbidities such as hypertension or heart failure)
  • Cost-control opportunities (like generic prescribing and MRI utilization review)
  • Key public health initiatives (such as smoking cessation and depression screening)

The next step is to develop appropriate clinical performance measures. For example, an asthma care program could track asthma control rates, screening frequency and percentage of patients with an up-to-date asthma action plan. The program could also track cost measures such as drug expenses, physician visits and emergency room visits.

Clinical programs should also develop care plans that define care protocols for various conditions. Program leaders can use process mapping to create care pathways that encompass ambulatory, inpatient, post-acute and home health interventions. Care gaps reports can be created to identify opportunities to enhance delivery of patient care according to care protocols and measure clinical care performance by care setting.

Physicians who are used to encounter-based reimbursement need guidance on how to be successful within a clinically integrated initiative. Support should focus on helping physicians manage patients within care plans through the use of care coaches and care coordination tools. Many physicians will also need coaching on how to incorporate nurses, dietitians and other support providers into care efforts aimed at managing the patient outside the traditional office setting.

Proactive medicine is key. Traditionally, a physician knows that a patient has a problem only when the patient comes in for an appointment. The success of clinical integration will hinge on physicians' ability to anticipate and prevent patient problems. To do this, physicians will need to incorporate care gap reports into clinical care and adopt new processes — for example, assigning a nurse to call patients with high-risk diabetes to ensure hemoglobin A1C is reported according to the defined diabetic clinical treatment protocol.

4. Technology Infrastructure

New connectivity and point-of-care tools make hospital-physician collaboration more possible than ever. The risk is overspending on technology and under-delivering on functionality. The key to avoiding these problems is to create a focused IT investment strategy.

The first priority is to invest in technologies that support coordination of care. One approach is to develop a health information exchange that connects ambulatory electronic medical records (of both employed and independent physicians), the hospital EMR, pharmacy information systems, labs, etc. The goal is to create a patient longitudinal record that allows physicians, nurses and other providers across the care community to track patient care in every setting.

Next, begin investing in technologies that support population health management. A clinically integrated organization needs to be able to aggregate and analyze clinical data so it can identify performance shortfalls and strategize improvements. Stage 1 meaningful use data from the ambulatory EMR and Physician Quality Reporting System can serve as a starting point, but to achieve significant gains in quality and cost, the organization needs comprehensive clinical and claims data from disparate information systems. The solution is to create a disease registry, a database that enables an organization to capture information from various provider systems and sources. The key is to incorporate a tool that allows the clinically integrated organization to run performance analytics on clinical programs, care settings, provider performance and cost utilization.

Clinically integrated organizations should also invest in technologies for connecting patients. Patient electronic engagement — via patient portals and secure messaging — is a requirement under stage 2 meaningful use. Beyond the requirements, organizations should explore patient portal and personal health record technologies for involving patients more deeply in clinical programs. 

Tying it all Together

The overall goal of the four-pillar platform is to link clinical outcomes to cost management with the aim of negotiating value-based payor contracts. In light of this goal, clinically integrated organizations need to be able to aggregate data for the entire network and compare outcomes to community performance. 

For example, a clinically integrated organization might set the goal of reducing high-risk diabetic patients from 12 percent to 8 percent of its patient population, compared to a community-wide rate of 10 percent. If the organization can achieve this outcome and demonstrate it with valid data, it will be in a position to negotiate favorable risk-based or shared savings performance contracts that enhance revenue and drive patient volume. 

Looking Ahead

While both hospitals and physicians have several options for taking advantage of new payment models, clinical integration represents the best opportunity for both parties. The key to success is a flexible strategy that emphasizes effective governance, aligned incentives, clinical programs and appropriate technology. 

None of these pillars can be built overnight, but leading organizations are making steady headway in each area. Clinical integration is not a project with a defined endpoint, but an evolution that will require ongoing attention, quality improvement, resources and leadership.

Clinical Integration, Health Directions

Topics: Clinical Integration, Clinically Integrated Care, Four Pillars, 4 Pillars, Technology Infrastructure, Clinical Programs, Aligned Incentives, Collaborative Leadership

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