Healthcare Policies Drive Integration

Regardless of whether you are a metropolitan or rural provider, hospital or physician, the Federal Government policy priorities are driving healthcare providers to consolidate and integrate together. Specifically, the government meaningful use financial incentives are designed to motivate providers to adopt electronic health records (”EHR”) which may ultimately establish a national health information exchange between all providers. The government policies are also the foundation of the proposed accountable care organization (“ACO”) model. The ACO model requires providers to integrate into one legal organization to implement best practice protocols, patient centered care and reduce the cost of health services in exchange for a share in savings obtained from the Medicare Program. Likewise, the Centers for Medicare and Medicaid Innovation (“CMI”) developed demonstration programs that change provider’s payment models into one consolidated bundled payment or value based purchasing payments. Both of these initiatives require hospitals and physicians to collaborate in clinical care coordination and billing functions.

As federal policies drive providers together, providers must carefully examine the different forms of integration. On one hand there is the legal organization integration and on the other hand merely operational integration. Legal structures vary from management agreements or lease agreements to direct sale and ownership. Because management agreements are the least intrusive and do not actually transfer assets, management agreements may be more appropriate to providers who need consulting guidance and some additional resources while preserving the provider’s independent control of its organization. In contrast, lease agreements may be appropriate for those facilities that are seeking more financial assistance, physician recruitment assistance and transfer of operational control. Finally, the complete transfer of all assets and control including all governance and decision making may be the right option for some organizations that no longer wish to operate in the healthcare industry. Depending upon the organization’s needs, a legally binding agreement is recommended to facilitate the appropriate level of integration and to protect the parties’ interests.

Providers that want to maintain their independence, operational integration, instead of legal integration, may be more appropriate. One type of collaboration that does not necessarily involve having someone manage or control an organization, could include information technology integration. Many providers are able to integrate best practice protocols, patient centered care and improved quality outcomes through the use of technology. Likewise, the use of telemedicine allows rural providers to access specialty services that are normally provided in metropolitan areas. This again keeps specialized services local in the community and accessible to patients without transferring the assets or control of the rural community provider to a larger metropolitan system. Likewise, telemedicine can integrate physicians with both rural providers and larger metropolitan facilities; thus, improving the integration and transmission of patient information throughout the State regardless of the patient’s residence.

Notwithstanding which type of approach or integration model the providers deem appropriate, it is clear that the healthcare policy priorities created by the Government are focused upon integrating providers to provide one interdisciplinary approach to a patient’s needs. By providing this interdisciplinary approach and best practice protocols, the Government is seeking to improve the overall quality outcomes which in turn should have a market reduction in the cost of healthcare delivery. Healthcare providers must continually evaluate the resources needed to survive and best meet the needs of the community. Providers must also stay tuned to the legislative developments which may restrict financial incentives that are currently driving integration. Judicial decisions from the Supreme Court on the Patient Protection for Affordable Care Act will also impact the future healthcare policies. Therefore, as providers continue to consolidate resources, the legal or operational integration should include terms and conditions to address future legislative and judicial decisions.

Comments are closed.