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Building a clinically integrated network (CIN) that brings together a hospital and community physicians, does not have to be a long, difficult process. In a presentation given at the 2014 AHLA Physicians and Hospitals Law Institute, PYA Principal David McMillan, Flagler Hospital Chief Operating Officer Jason Barrett, and Smith Hulsey & Busey Attorney Shareholder Charmaine T. Chiu followed one healthcare community’s journey to form a CIN in nine months.
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
From Zero to CIN:A Case Study of One Health Care
Community’s Journey to Form a ClinicallyIntegrated Network in Nine Months
Jason BarrettCharmaine T. ChiuDavid W. McMillan
February 6, 2014
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Background – Flagler Hospital
• Non-affiliated 335-bed acute care hospital in St.Augustine, Florida.
• Most physicians on 250-member medical staff insmall, independent practices.
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Strategic Environment
Internal Challenges Traditional medical staff
relationship between thehospital and its physicians andbetween physicians.
No forum to share ideas orconsider common strategy.
Limited trust on which to buildbroader clinical or economicrelationships.
External Challenges Anticipated revenue reductions.
Threatened competition fromregional health systems.
Healthcare reform uncertainty.
Private payer reform.
Local employers looking tohospital for leadership onstrategies to reduce costs.
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Board of Directors Leadership
• Through facilitated strategicplanning, Board concludedhospital-physician alignment keyto meeting challenges
– Opportunity to reduce costs bychanging physician behavior
– Shared interest in protecting marketfrom outside competitors
– Clinical integration key to paymentand delivery system reform
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
• Board made daring decision to delegate leadership tophysicians of clinical integration strategy development
• Several recognized physician leaders recruited to ClinicalIntegration Committee
Board’s Charge to the CIC:
9 months to educate and gain commitmentfrom physicians to develop successful CIN
Promoting Buy-in:The Clinical Integration Committee (CIC)
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Five Steps To Develop aClinically Integrated Network
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Proposed Timeline
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Physician Education andConsensus-Building
November 2012 – February 2013
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Defining Clinical Integration
Functional
Core Functions:
• Align provider interests
• Promote Evidence BasedMedicine
• Facilitate care coordination
• Negotiate and manage payercontracts
Additional Support Services:
• Back office functions
• HR
• Compliance
• Cooperative strategic planning
• Cooperative product linedevelopment
Organizational
• “Clinically Integrated Network”
• Lean Infrastructure to provideprovider accountability
• Vehicle for independentproviders to jointly negotiatewith payers
• Access to
1. Patients
2. Payment
3. Actionable Information
Legal
Clinical Integration is:
• An active and ongoing programto evaluate and modify practicepatterns by participatingproviders
• Designed to create a highdegree of interdependence andcooperation amongindependent physicians
• With the objective of ensuringquality and controlling costs
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Governance
Quality andOperations
TechnologyNetwork
Development
Finance
Formation of CIC Workgroups
• CIC appreciated need forbroader physicianparticipation indevelopment process
• Created five workgroups(comprised of physiciansand supported by hospitaladministration)
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Workgroup Assignments
Technology
Communications/Network Development
Finance
Governance
Develop detailedorganizational chart for PHOto operate CIN
Review, revise, approve PHOoperating agreement
Develop PHO Board electionprocess
Quality/OperationsDefine process to establish/enforce standards of care andsupport care coordination
Explore opportunities forhospital efficiencies and MSOservices
Identify PHO strategicplanning and staffing needs
Identify CIN technology needsand related budget
Develop RFP and schedule forIT solution implementation
Devise medical staffeducation and recruitmentstrategy
Prepare 3 year financialprojections with anticipatedexpenses and income fromparticipation fees, sharedsavings, and network accessfees
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
• CIC and workgroup members (50 physicians)participated in two-day summit
– Foster physician buy-in
– Develop CIN governance structure
• Consensus-driven process created physician ownershipand commitment to continuing process
• Key Lesson Learned:
– Start with governance to build necessary trust throughappropriate balance of power
Physician Summit
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Creating Consensus-drivenGovernance Structure
February 2013 – April 2013
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Evolution of the GovernanceStructure
Build a Straw Man
Allow leaders to make the Straw Man theirown
Do not be carried away by minutiae
Be flexible to the desired changes
Listen, Listen, Listen
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
• Is a separate physician organization (“PO”) useful, desirable, necessary?
• If so, how should PO be structured and governed?
• How would PO facilitate trusting relationship among physicians andbetween physician and hospital?
• How would physicians relate to hospital if no PO is formed?
“Stuff the Straw Man”
PhysicianOrganization
(Governing Board)
IndependentPhysicians
Group Practice
Preliminary Questions Posed to Physicians:
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Stuff the Straw Man
IndependentPhysicians
GroupPractice
PhysicianHospital
Organization(“PHO”)
(Governing Board)
Hospital(Governing Board)
PhysicianOrganization
(“PO”)(Governing
Board)
(Optional Ownership Structure)
Ownership
Ownership
Contract(ProtocolDevelopment)
Ownership
Contract(Admin MSO)
MedicalStaff
• What would be PHO’s purpose?
• How should PHO be structure and governed?
• How would PHO facilitate trust relationship betweenhospital and physicians?
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Stuff the Straw Man
IndependentPhysicians
Group Practice
Physician HospitalOrganization
(“PHO”)(Governing Board)
Hospital(Governing Board)
PhysicianOrganization
(“PO”)(Governing
Board)
(Optional Ownership Structure)
Ownership
Ownership
Contract(ProtocolDevelopment)
Ownership
Contract(Admin MSO)
ExecutiveCommittee
QualityImprovement/Peer ReviewCommittee
MedicalStaff
ProtocolDevelopmentCommittee
PhysicianEducationCommittee
Subcommitteesby specialty
and/or diseasecategory
Education/Communication
s Committee
ExecutiveCommittee
CorporateComplianceCommittee
Clinical Co-ManagementCommittee
NetworkContract
Mgt.Committee
ITCommittee
Audit/Finance
Committee
GovernanceCommittee
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Physicians’ Consensus Decision
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Governance Takeaways• 1 vote physician block (majority vote of 7 physician
members)
• 1 vote hospital block (majority vote of hospitalmembers)
• “Forces” consensus-driven decision making
Governance structure is the critical decision inCIN formation.
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Medicare Shared Savings Program
• Initial resistance, but came to appreciate revenuepotential
• Regulatory requirements provided framework
• Application deadline forced discipline in task completion
• Value of waivers for organization with large number ofindependent providers
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Formalize PHO
• Board unanimouslyaccepted CIC’srecommendations at April2013 board meeting
• 20+ physicians soughtboard membership
• All medical staff membersinvited to participate,more than half accepted
• Participants voted forPHO’s initial physicianboard members
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Formalize PHO• Drafting formational documents
– Articles of organization
– Operating agreement
– Participation agreement (terms ofmembership)
• Approval of formational documents
– Separate legal counsel for hospital andphysicians
– Organizational meeting
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Formation to Operations
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Keys To Success Empower physicians to lead the process
Education is key
Foster culture of trust
Get everyone in same room and set expectation that they own the process
Don’t focus solely on the big picture – a step-by-step implementation planis essential
Enlist an honest broker
Build and maintain lines of communication between and among physicians andhospital executives.
Develop straw man to which hospital and physicians can react
Revise and refine model based on input
Develop and implement work plans for network development and deployment.
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Questions?
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AHLA Physicians and Hospitals Law InstituteFebruary 5-7, 2014
Contact Information
Jason BarrettChief Operating Officer
Flagler Hospital
Charmaine T. ChiuAttorney ShareholderSmith Hulsey & Busey
David W. McMillanPrincipal
Pershing Yoakley & Associates, P.C.
