Clinical Integration: A Cornerstone for Population Health Management

The primary business of healthcare today is managing chronic conditions such as diabetes, asthma, heart disease, and arthritis. Approximately three fourths of all healthcare expenditures are for the care of chronic conditions, and about one half of Medicare patients are treated for five or more chronic conditions and see, on average, seven to 11 physicians annually (Pham, Schrag, O'Malley, Wu, & Bach, 2007). The diffusion of responsibility for a patient's care over multiple caregivers too often results in fragmented care that is uncoordinated, unsafe, unsatisfying, and unnecessarily expensive. Recognizing that fee-for-service payment has fueled fragmented care, healthcare payers are increasingly moving to value-based payment models that incentivize improved coordination of care, quality, and efficiency.The movement to value-based payment is accelerating, as demonstrated by, among other things, the recent Centers for Medicare & Medicaid Services announcement that one half of Medicare spending outside of managed care will be paid for via value-based models by 2018 (Burwell, 2015) and by the creation of the Health Care Transformation Task Force (a group of large employers, payers, and health systems), which intends to shift 75 percent of its member business to value-based contracts by 2020 (Health Care Transformation Task Force, 2015). In the emerging value-based healthcare economy, it will be necessary for health systems to rigorously manage the health of populations, whether the population is defined by chronic condition, age, geography, gender, or other characteristics. Indeed, population health management will be a requisite core competency for health system success in the future.CLINICALLY INTEGRATED SERVICESSuccessful population health management will require that health systems integrate clinical services across providers, settings of care, conditions, and time. Toward this end, many healthcare organizations are pursuing alliances, partnerships, or structural changes aimed at facilitating clinical integration. Prominent among these are efforts to consolidate providers into vertically integrated delivery systems (IDSs). Many health systems are purchasing physician practices and employing the formerly independent physicians, believing that employment will better align physician interests with the goals of improving quality and lowering costs.Proponents of vertically integrated consolidation strategies argue that full administrative and financial integration is necessary for clinical integration. They say that the IDS organizational structure leads to more coordinated care across the continuum of services, less unnecessary or duplicative care, lower administrative and transactional costs, better use of expensive medical technology, and more resources for health promotion and other community needs. Despite the enthusiasm with which IDS proponents make their case, there is scant evidence to support the claimed efficiency benefits, or quality performance advantages of vertically integrated health systems (Baker, Bundorf, & Kessler, 2014; Blossom & Wan, 1999; Burns, Goldsmith, & Sen, 2013; Goldsmith, Burns, Sen, & Goldsmith, 2015; Hwang, Chang, LaClair, & Paz, 2013). It is important to point out that integrated delivery system and integrated patient care are not the same and should not be equated. Integrated patient care (which results from clinical integration) is about the patient and how patient care services are provided in a coordinated manner, whereas an IDS is about the structure of the organization and how its parts fit together. The latter is not a priori linked to the former. This distinction was well illustrated by the Veterans Affairs Healthcare System in the early 1990s, during which time the VA was unquestionably an IDS but was not providing integrated patient care (Kizer & Dudley, 2009). Notwithstanding that some IDSs have achieved a high degree of clinical integration, the preponderance of evidence simply does not show that integration achieved through common ownership is superior to other models of clinical integration (Baker et ah, 2014; Blossom & Wan, 1999; Burns et al. …