Breaking Down the CIN Model (Part III)

By now, you have discerned that I put a lot of importance on the clinically integrated network. As I have said before, this is a good strategic model, moving forward, to navigate the healthcare rough air ahead. The business argument for developing a CIN involves contracting with payers & distributions of funds.

A. Contracting:
Generally, payer contracts reward a CIN for their demonstrated value (that’s what the effort is about) in 3 ways – premium fee-for-service rates, performance incentives and shared savings. The higher fee-for-service rates are meant to reward our activities that lower cost and standardize care across the network. Incentives that we get paid for are largely outcome measures but can be for process requirements (ie. ensuring appropriate testing). Shared savings can be based off of a baseline (usually for a population, such as diabetes mellitus), to determine expected cost for the upcoming year, then comparing expected cost to actual cost.

B. Distribution of Funds:
This requires construction of a methodology that meets Fair Market Value and that ensures compliance with legal requirements. We have some flexibility in how to set this up, but generally, there are 3 buckets: global network performance with equal distribution to all participating providers, local initiative performance with distribution different for different specialties, and individual participation & performance with personal clinical achievements. All 3 or parts thereof can be implemented.

The CIN model would be good for us. By us, I mean hospitals and independent practices that participate. I envision this as an open model, with some basic participation criteria. This is not some exclusive narrow network that prevents practitioners from working with other organizations outside the CIN. It’s about working together to meet certain quality goals while driving costs down, and making patients trust that they are receiving the best possible care, all the while protecting our revenues and thriving economically.