So, now you’ve formed a clinically integrated network, and you’re ready actually to do something? What should be the function of a PCCI network? In my opinion and based on my experience with these types of organizations, the following activities should be prioritized….
- Care process design and improvement — Common care processes used in healthcare should be systematically designed, monitored, and refined to provide high-quality, low-cost outcomes and do so in the most patient-centered fashion possible. This systematic approach, which I call the care process design system (CPDS), will be described in more detail in the next section of this article. Local implementation of the CPDS should be expected of each provider within the PCCI network. Each provider’s willingness to do so and their willingness to transparently share their results should be the main criteria by which they are evaluated for performance within the PCCI network.
- Value-based contracting — The federal trade commission (FTC) and other regulatory bodies have clearly stated that clinically integrated networks can jointly contract as long as their main focus remains quality improvement and cost-efficiency. Therefore, a PCCI network should pursue contracts with both governmental (CMS) and commercial payers, which reward the production of high-value (quality/cost) care delivery. These may include bundled or episodic payment agreements, global capitation arrangements, shared savings agreements, or other alternative payment models introduced by CMS and many other private payers. The goal in aggressively pursuing value-based contracts should not capture a high volume of patients but instead, capture a high percentage of patients in certain populations who value-based reimbursement (VBR) models cover. This will entail competing on value vs. volume production, a major cultural shift for most provider networks.
- Assumption of risk — To better align providers with payers, the PCCI network should offer its own health plan to employers (self-insured and others) and individuals. This will likely involve the network engaging an independent third-party administrator (TPA) to help with the administrative activities involved in running a private label health plan. Bypassing established commercial health plans and directly contracting with large and small employers and individuals will ensure that efforts are aligned between the providers and payers as it relates to creating high value for the patients served. Swimming upstream and capturing more of the full premium dollar will also help PCCI networks become financially self-sufficient and avoid dependence on organizations with large cash reserves, e.g., hospitals or health systems, for financial support.
While the above three priority functions sound rather straightforward, they are actually quite complex and difficult to accomplish. Nevertheless, if the US healthcare system claims it is the “best in the world,” it is imperative that PCCI networks be created and learn to function in the areas outlined above. More details on how to do this successfully will be further outlined in future sections of this article.