AHLA BB. Zero to CIN: A Case Study of One Health Care Community s Journey to Form a Clinically Integrated Network Jason Barrett Chief Operations Officer Flagler Hospital St. Augustine, FL Charmaine T. Chiu Smith Hulsey & Busey Jacksonville, FL David W. McMillan PYA Knoxville, TN Physicians and Hospitals Law Institute
From Zero to CIN: A Case Study of One Health Care Community s Journey to Form a Clinically Integrated Network in Nine Months Jason Barrett Charmaine T. Chiu David W. McMillan Christopher K. Wilson February 6 and 7, 2014 Page 0 Background Flagler Hospital Non-affiliated 335-bed acute care hospital in St. Augustine, Florida. Most physicians on 250-member medical staff in small, independent practices. Page 1 1
Strategic Environment Internal Challenges Traditional medical staff relationship between the hospital and its physicians and between physicians. No forum to share ideas or consider common strategy. Limited trust on which to build broader clinical or economic relationships. External Challenges Anticipated revenue reductions. Threatened competition from regional health systems. Healthcare reform uncertainty. Private payer reform. Local employers looking to hospital for leadership on strategies to reduce costs. Page 2 Board of Directors Leadership Through facilitated strategic planning, Board concluded hospital-physician alignment key to meeting challenges Opportunity to reduce costs by changing physician behavior Shared interest in protecting market from outside competitors Clinical integration key to payment and delivery system reform Page 3 2
Promoting Buy-in: The Clinical Integration (CIC) Board made daring decision to delegate leadership to physicians of clinical integration strategy development Several recognized physician leaders recruited to Clinical Integration Board s Charge to the CIC: 9 months to educate and gain commitment from physicians to develop successful CIN Page 4 Five Steps To Develop a Clinically Integrated Network Page 5 3
Proposed Timeline Page 6 November 2012 February 2013 Physician Education and Consensus-Building Page 7 4
Defining Clinical Integration Legal Clinical Integration is: An active and ongoing program to evaluate and modify practice patterns by participating providers Designed to create a high degree of interdependence and cooperation among independent physicians With the objective of ensuring quality and controlling costs Core Functions: Functional Align provider interests Promote Evidence Based Medicine Facilitate care coordination Negotiate and manage payer contracts Additional Support Services: Back office functions HR Compliance Cooperative strategic planning Cooperative product line development Organizational Clinically Integrated Network Lean Infrastructure to provide provider accountability Vehicle for independent providers to jointly negotiate with payers Access to 1. Patients 2. Payment 3. Actionable Information Page 8 Formation of CIC Workgroups CIC appreciated need for broader physician participation in development process Created five workgroups (comprised of physicians and supported by hospital administration) Finance Network Development Governance Technology Quality and Operations Page 9 5
Workgroup Assignments Governance Develop detailed organizational chart for PHO to operate CIN Review, revise, approve PHO operating agreement Develop PHO Board election process Quality/Operations Define process to establish/ enforce standards of care and support care coordination Explore opportunities for hospital efficiencies and MSO services Identify PHO strategic planning and staffing needs Technology Identify CIN technology needs and related budget Develop RFP and schedule for IT solution implementation Communications/ Network Development Devise medical staff education and recruitment strategy Finance Prepare 3 year financial projections with anticipated expenses and income from participation fees, shared savings, and network access fees Page 10 Physician Summit CIC and workgroup members (50 physicians) participated in two-day summit Foster physician buy-in Develop CIN governance structure Consensus-driven process created physician ownership and commitment to continuing process Key Lesson Learned: Start with governance to build necessary trust through appropriate balance of power Page 11 6
February 2013 April 2013 Creating Consensus-driven Governance Structure Page 12 Evolution of the Governance Structure Build a Straw Man Allow leaders to make the Straw Man their own Do not be carried away by minutiae Be flexible to the desired changes Listen, Listen, Listen Page 13 7
Stuff the Straw Man Preliminary Questions Posed to Physicians: 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 and between physician and hospital? How would physicians relate to hospital if no PO is formed? Independent Physicians Group Practice Physician Organization (Governing Board) Page 14 Stuff the Straw Man (Optional Ownership Structure) Independent Physicians Group Practice Ownership Physician Organization ( PO ) (Governing Board) Ownership Contract (Protocol Development) Physician Hospital Organization ( PHO ) (Governing Board) Ownership Hospital (Governing Board) Contract (Admin MSO) Medical Staff What would be PHO s purpose? How should PHO be structure and governed? How would PHO facilitate trust relationship between hospital and physicians? Page 15 8
Stuff the Straw Man (Optional Ownership Structure) Independent Physicians Group Practice Ownership Physician Organization ( PO ) (Governing Board) Executive Ownership Contract (Protocol Development) Physician Hospital Organization ( PHO ) (Governing Board) Executive Ownership Contract (Admin MSO) Hospital (Governing Board) Medical Staff Physician Education Protocol Development Quality Improvement /Peer Review Education/ Communication s Audit/ Finance Governance Corporate Compliance Subcommittees by specialty and/or disease category Clinical Co- Management Network Contract Mgt. IT Page 16 Physicians Consensus Decision Page 17 9
Governance Takeaways 1 vote physician block (majority vote of 7 physician members) 1 vote hospital block (majority vote of hospital members) Forces consensus-driven decision making Governance structure is the critical decision in CIN formation. Page 18 Medicare Shared Savings Program Initial resistance, but came to appreciate revenue potential Regulatory requirements provided framework Application deadline forced discipline in task completion Value of waivers for organization with large number of independent providers Page 19 10
Board unanimously accepted CIC s recommendations at April 2013 board meeting 20+ physicians sought board membership All medical staff members invited to participate, more than half accepted Participants voted for PHO s initial physician board members Formalize PHO Page 20 Formalize PHO Drafting formational documents Articles of organization Operating agreement Participation agreement (terms of membership) Approval of formational documents Separate legal counsel for hospital and physicians Organizational meeting Page 21 11
Formation to Operations Page 22 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 plan is essential Enlist an honest broker Build and maintain lines of communication between and among physicians and hospital 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. Page 23 12