Clinical Integration: A New Model for Cost-Effective Health Care

In our current health care environment, hospitals face increasing urgency to strengthen relationships with physicians. Among the concerns are an aging population driving increased demand for health care (as well as a growing Medicare population), reimbursement reductions and changes, and physician shortages in key specialties. In this environment, it is more critical than ever that hospitals engage physicians to enhance health care quality while also improving efficiency and cutting costs across all care settings.

To achieve these goals, physician organizations at leading systems such as Covenant Health System, a member of St. Joseph Health System based in Orange, California, and Memorial Hermann Healthcare System of Houston, have developed clinical integration (CI) programs. These can serve as a bridge for hospitals to join the Medicare Shared Savings Program after first developing accountable care capabilities through contracts with private payers and local employers.

How does clinical integration work?

In CI programs, a network of independent physicians collectively commits to collaborate with a hospital or health system to deliver improvements in quality and cost of care. Once the CI program is established, physicians in the CI network may negotiate collectively for commercial payer contracts and present them for antitrust review by the Federal Trade Commission (FTC). These contracts can include pay-for-performance components that allow both physicians and hospitals to receive incentive payments for improved quality and efficiency achieved via enhanced collaboration, which must be demonstrated through compliance with recognized clinical best practices and improved outcomes.

Both Covenant and Memorial Hermann developed their CI programs with CRIMSON physician performance technology services from The Advisory Board Co., a global research, consulting, and technology services firm serving a membership of more than 2,900 of the world’s leading health care organizations.

CRIMSON is a division of The Advisory Board that helps hospitals and health systems advance quality goals and secure cost savings by providing data, business intelligence, and other services to eliminate inefficiencies in care delivery.

Covenant Health Partners

Covenant Health Partners is the Physician Hospital Organization arm of Covenant Health System, a five-hospital system in Lubbock, Texas. Founded in 2007, Covenant Health Partners today includes more than 300 community-based physicians, half of whom are employed by Covenant Medical Group, and half of whom are independent physicians in the community. As a CI network, the organization has entered into several contracts and has achieved exceptional gains in clinical performance, including reducing average length of stay by 1.1 days and eliminating incidence of ventilator-associated pneumonia cases for 18 months.

“Physicians have responded well to our model for engaging them in the clinical integration program, especially the ‘self service’ component," says Michael Camacho, COO, Covenant Health Partners. “To be eligible for shared savings, both employed and independent physicians are required to log in and review their own severity-adjusted cost and quality performance data that is benchmarked against their peers. Last year, 80 percent of physicians in the program logged in to examine their data and are a driving force toward positively impacting patient outcomes and quality metrics.”

“With health care reform requiring more quality, cost efficiency, and transparency from physicians and health care providers, Covenant Health Partners, together with CRIMSON, is transitioning toward using clinical integration as a base for population management to produce the highest quality of care with the lowest cost,” says John Grigson, CFO of Covenant Health System and CEO of Covenant Health Partners.

Memorial Hermann Physician Network

Memorial Hermann Physician Network, the physician group associated with the 11-hospital Memorial Hermann Healthcare System in Houston, received FTC review prior to launch with favorable feedback in 2008 for a CI program that now includes 2,400 physicians. Benchmarked against nonparticipating physicians, CI program physicians’ average lengths of stay were 29-percent lower, and complications of care were 15-percent lower during the first year of the program. Subsequent years of the program have shown similar performance.

“We have put a lot of effort into educating our physicians on CRIMSON, and they have come to trust the data we collect and its reflection of their performance,” says Shawn Griffin, M.D., chief quality and informatics officer for Memorial Hermann Healthcare System and Memorial Hermann Physician Network. “Today, we dynamically track clinical activity across care settings and achieve an unprecedented level of coordination. Our clinical integration program has been one of the critical tools that have enabled us to continue to provide quality care while reducing the cost of delivering care to our own employees by 9 percent.”

Participating physicians who met the bonus criteria with Memorial Hermann received their first bonus payout in fall 2010, which has increased interest in the program from physicians who had not previously participated.

“Covenant Health System and Memorial Hermann Healthcare System have emerged as leaders in building an environment of trust not just with the physicians they employ, but also with physicians at independent practices across the continuum of care,” says Paul Roscoe, CEO, CRIMSON. “For many hospitals, extensive employment of physicians is not an option. In these cases, clinical integration presents the most effective means for hospitals and physicians to participate in aligned incentive models measuring quality and cost metrics.”

For more information on CRIMSON clinical integration services, visit The Advisory Board’s website.

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