Most hospitals and health networks are run as for-profit or nonprofit corporations. The biggest of these have an employee base that is large enough to support a clinically integrated network, or CIN.
By leveraging the benefits of a CIN to lower costs and improve care, healthcare corporations can reduce benefits costs and enhance the quality of life for their employees, while opening up new revenue streams through referrals from partnered physicians.
What is a CIN?
A CIN is a legal structure that facilitates collaboration between healthcare providers.
Before a CIN is established, the corporation or health system must define two individual concepts: first, why it is pursuing the CIN option, and second, why local physicians will be interested in joining it.
As clinical integration and a shift to value-based reimbursement continue to build, many health systems can increase their competitiveness by leveraging the formation of a CIN as a strategy to gain market share. Being an early adopter can help maintain an advantage over slow-to-move competitors, especially if the shift to value-based reimbursement is still on the horizon.
In regions where the shift to value-based care is already in progress, forming a CIN can help maintain access to patient populations. In either case, there are two primary goals when forming a CIN:
1. Alignment and collaboration
There is a need to align independent physicians with the health system without actually employing them, as many providers don't wish to give up their independence or tax numbers. A CIN creates a framework within which both independent and system-employed physicians can collaborate for care improvement.
2. Participation and premium share
In addition, health systems seek to maintain their option to participate in value-based/risk contracts and work toward taking on a larger share of the overall premium. A CIN allows health corporations to take on additional risks and acquire greater returns from outside their direct network.
Qualifying as a CIN
To qualify as a CIN, the following qualifications must be met:
- Physicians must actively participate in the CIN.
- Physicians must make investments in the network.
- Physicians must be held accountable to quality measures.
- Outcomes must be measurable through benchmarks or clinical metrics.
- Non-exclusivity must apply to physicians who join a CIN.
Difference between CIN types
It's worth noting that healthcare systems aren't exclusively forming CINs. While CINs implemented by these organizations are the most common, other corporations can also create a CIN, as long as it remains physician-led.
Private equity firms are purchasing hospitals, clinics, laboratories, and private doctor and dental practices. Private equity-formed CINs allow corporations to leverage the benefits of a CIN as well as provide ease of access to quality care for their own workforce.
Specialty physicians and medical groups are selling market shares to private investors, and using management firms as the go-between, keeping ownership of the practice to meet CIN qualifications.
High return specialties such as dermatology, orthopedics, and ambulatory services are common targets for private equity firms seeking to create and profit from a CIN, although laboratories and even nursing homes may be acquired.
CIN options for large corporations
There are two options when it comes to a CIN. First, a corporation can join an existing CIN. This is a good option if there isn't a strong tie to a physician network for the corporation, and the intent is to gain the benefits of a CIN without the cost of setting up and managing one.
Forming a CIN can be prohibitively expensive, with capital expenditures reaching in excess of $1 million. In addition, the necessity to have the CIN be physician-led can cut many corporations out of the running.
Joining an existing CIN is an easier option, but won't yield the same level of control as creating an independent entity. If there is already a strong local CIN in existence, a corporation can lend impetus to its growth by investing in it, driving it forward to greater impact and better attracting physicians locally and elsewhere.
The CIN can become a major revenue driver and provide further opportunities for investment in the form of extra services and acquisitions, such as labs and ambulatory services. The end result is an arrangement that benefits everyone involved.
Benefits of a CIN in general
A CIN can provide benefits for both physicians and patients.
- Local physician alignment leads to increased network sufficiency, as the right mix of specialists and primary care physicians will be set up to anticipate all patient needs.
- Using hub-and-spoke architecture to align additional physicians outside the system's geographic reach helps build a broader range of relevant products.
- Clinical integration between physicians and hospitals can provide greater familiarity with and coordination of care for all patients, including the aligned physician's entire panel.
- The focus on patient-centric care can improve a health system's reputation and entice new patients to seek care from aligned physicians.
- With preventive care as a priority, overall healthcare costs can be reduced and revenues protected from failure to meet cost-based measures for assessing reimbursement rates.
- Forming a CIN puts healthcare providers and networks in a better negotiation stance with insurers, increasing reimbursement rates based on value of care provided.
Benefits of CINs for larger corporations
For corporations, a CIN can significantly lower healthcare spend, especially if healthcare benefits for employees are self-funded. Having a CIN available to service healthcare needs can also improve the overall well-being of the company workforce.
Additionally, larger corporations that use CINs can take advantage of investment opportunities, using the CIN as a vehicle for revenue growth while keeping its structure as a physician-led entity intact.
Where Tangible fits in
Without data, there is no CIN. The ability to appropriately manage and share data across a larger CIN requires finding the right partner. Tangible facilitates the sharing of accurate data across the healthcare ecosystem, keeping it secure as it travels between providers, medical facilities, registries or patients.
We enhance CIN results for small physician groups, hospitals, and larger corporations through connectivity, data transformation and reporting.To learn more about how our solutions can help you start your own CIN, contact Tangible today.
