Making clinical integration work

June 25, 2011

To many physicians, the current healthcare environment is complex and overwhelming. From accountable care organizations, global capitation, and value-based purchasing to episode payments, episode groupers, and bundled payments, the terminology seems to be addressed to larger organizations than small primary care groups.

Key Points

In fact, several strategies are available under the label of "clinical integration" that can position small primary care practices for current and future changes. Many of them also can improve small-practice financial margins and quality outcomes while increasing efficiency.

CHANGING THE ANTITRUST RULES

Without defining what clinical integration was, the regulators described a scenario in which they would not enforce antitrust laws if the physicians joined forces to improve quality by using clinical practice guidelines; investing in some degree of infrastructure-whether with hardware, software, or even their own time-to measure their own performance; taking action to deal with those who didn't measure up; and sharing their data with payers.

In advisory opinions approving the activities of independent practice associations (IPAs) in 2002 and 2007, and of a physician-hospital organization (PHO) in 2009, the FTC approved clinically integrated networks of physicians that used guidelines or protocols, contributed their time in developing the program, used Web-based health information technologies, adopted performance goals and targets, and were nonexclusive.

By the same token, in many settlements with other IPAs, the FTC has repeatedly said, essentially: "If you had been clinically integrated, your collusive bargaining with competitors would have been allowed." The FTC has emphasized the interdependence of physicians to improve quality and value as protection against government antitrust enforcement. But very few physicians have taken advantage of this opportunity over the past 15 years. What has changed now?

WHAT'S DIFFERENT TODAY

The Patient Protection and Affordable Care Act of 2010 uses the terms "quality," "value," "effective," and "efficient" more than any previous piece of federal legislation. At the same time, employers and public payers are calling for efforts to "bend the cost curve." All providers-hospitals and physicians alike-will be expected to deliver more "value"-that is, improved quality with controlled costs-and to reduce overuse. Moving away from the volume of services motivated by fee-for-service, the emphasis now is on episode payments-one-time payments covering a period of time during which a patient's specific condition was treated. Specific conditions include chronic care, predominantly treated by primary care physicians (PCPs).

The launch of Medicare's Physician Compare Web site reporting physician performance has made it clear that physicians will be measured and their performance publicly reported more than ever. Scoring well will matter in the public programs as well as in commercial pay-for-performance programs and other developing innovations. Against this background, the 1996 antitrust version of clinical integration likely would be insufficient to position physicians well for the new environment.