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St. Luke's Blogs

The Value in Clinical Integration

So why am I writing about clinical integration? I’m not a doctor, or for that matter, a clinical provider of any type, except that I do at times attempt to manage my own health care.
By Dr. David C. Pate, News and Community
May 14, 2012

I’ve asked Randy Billings, St. Luke’s Health System vice president of payor and provider relations, to share his perspective on the difference clinical integration can make. His observations are presented here. I’ve introduced Randy in a previous post, and you’ll be hearing more from him and other members of our executive team as our journey of transformation continues. 

 A little more than a year ago, I was leading the contracting efforts for Advocate Health Care, a clinically integrated provider network in the Midwest, which gives me some perspective and which puts me in a position to support our physician-led integration effort. The clinical perspective is brought by our providers.

Most health care is delivered through provider networks that exist to perform a specific service: to create a single corporate entity, to combine similar provider types, or to deliver defined insurance benefits. Each network must deliver some measure of value.

But what’s value?

For St. Luke’s employees, value is conveyed through BrightPath, one example of a network with a panel of providers. The value is in providing access to the scope of medical services which St. Luke’s Health System offers as covered benefits in our employee health plan. 

For our customers, another network example is of the physicians, hospitals, and other providers that make up St. Luke’s Health System. The value there is in delivering better health to a population and providing better care for individuals at a lower cost. This is our Triple Aim, which Dr. Pate and others have written about in past blog posts.

I’m a numbers guy at heart, so that lower-cost dynamic intrigues me. In fact, balancing a checkbook is somewhat relaxing for me – even my own, as long as it’s not in the red. 

St. Luke’s Health System is spending tens of millions of dollars and committing other valuable resources to implement an electronic medical record across all our providers. And while the new EMR system is a great tool, the value is not merely in its installation. The real value isn’t even in how, or whether, it might become interoperable with other electronic information systems. 

The value is in how our network will incorporate that tool with other tools and capabilities to integrate clinically, so that we can improve quality, eliminate costs, coordinate care, and standardize best practices to truly achieve and advance our Triple Aim.

The value of the Triple Aim will materialize to the degree that we integrate clinically.

St. Luke’s has defined clinical integration as “health care providers in separate legal entities working together in an interdependent and mutually accountable fashion to pool infrastructure and resources, and develop, implement and monitor protocols, best practices, and various other organized processes that enable them to furnish higher quality care in a more efficient manner than could be achieved working independently.”

It’s a tall order. But the Triple Aim will be realized only within and dependent upon such a clinically integrated network.

And while the financial incentives of participating providers must be aligned, a clinically integrated network is not necessarily a network of providers under common financial ownership. The Patient Protection and Affordable Care Act allows for government-approved Accountable Care Organizations (ACOs) that can consist of otherwise financially independent provider competitors that are clinically integrated. 

Clinical integration with independent providers is clearly the essential building block of accountable care.

The federal government has not specified how clinical integration should take place, but has said an accountable care organization is characterized by:

1)      A formal legal structure to receive and distribute payments for shared savings.

2)      A leadership and management structure that includes clinical and administrative processes.

3)      Processes to promote evidence-based medicine and patient engagement.

4)      Reporting on quality and cost measures.

5)      Coordinated care for beneficiaries.

St. Luke’s Health System has declared its intention to apply this fall to become a federally recognized Accountable Care Organization (ACO) through participation in the Medicare Shared Savings Program (MSSP).

The System is committed not to an approved ACO structure for MSSP participation only, but to delivering on accountable care and the Triple Aim for all people within our region. That will occur through the efforts of individual providers, acting interdependently, through a clinically integrated St. Luke’s network of providers.

We can’t afford not to be physician-led in our clinical integration focus. Clinical integration will take much more effort, resources, and work to deliver on the tangible substance of value beyond the regulators’ basic checklist and an acceptable internal definition. 

I’m not a physician, but I can’t do my job without them. My job involves an understanding and incorporation of the economic dynamics and incentives that motivate the services, improve the quality, and encourage the engagement and coordination of our network providers. Together, we will be able to achieve clinical integration, the foundation upon which the value of our Triple Aim can be based.

About The Author

David C. Pate, M.D., J.D., is president and CEO of St. Luke's Health System, based in Boise, Idaho. Dr. Pate joined the System in 2009. He received his medical degree from Baylor College of Medicine in Houston and his law degree from the University of Houston Law Center.