Clinical Integration – The Essence

The term is becoming increasingly popular, much like Population Health a year ago ( Journalists are hearing Clinical Integration is necessary for healthcare systems to be successful in value-based payment models (e.g., bundled payments for surgical procedures, Medicare Shared Savings Program for FFS Medicare, or global prepayment in Medicare Advantage). So the next several posts will address various aspects of Clinical Integration.

First, let’s clarify the difference between two similar terms:

Zdenko Zivkovic / Foter / CC BY

Clinical Integration (CI) refers to how geographically separate hospitals, physicians and other healthcare personnel contemporaneously coordinate with each other their separate healthcare activities for the benefit of an individual patient or a cohort of patients.  For example, a middle aged man with acute onset LLQ abdominal pain, fever and constipation is seen by 3 physicians (PCP, Radiologist and General Surgeon) in two locations (rather than three) within a 6 hour period of time (rather than 6 days) that results in a single-stage colon surgery for acute diverticulitis (rather than a two-stage colectomy and colostomy complicated by perforation, sepsis and ICU resuscitation resulting from a 6 day evaluation in a fractionated care system).

Clinically Integrated Network (CIN) refers to financially separate healthcare providers (e.g., hospitals, surgical centers, physician groups, home health agencies) that form a shared legal entity that enables single-source contracting with payors, yet is protected from anti-trust prosecution, in accordance with the 1996 DOJ / FTC rule governing CINs.  The stated purpose of CINs is to facilitate Clinical Integration (CINs do NOT create CI, at best they facilitate its creation). In practice, many just raise local market prices without achieving significant improvement in clinical outcomes (several articles to read for additional information, but here’s something recent

The best litmus test for whether true Clinical Integration is being advanced in a particular conversation is to ask this one question: ‘Will the contemplated operational, informational or cultural change reduce the duration of time that elapses between onset of illness (in the case above, acute diverticulitis) and definitive resolution (in the case above, a curative operation)?’  That’s how value is generated for the patient (avoidance of sepsis, intubation and rehab) and delivery system (lower total cost of care, higher brand).

Population Health – the how

I continue to hear strategy pundits say they either don’t know what population health means or that population health doesn’t exist.

If they are confused by the definition or existence of population health, they’ve been asking the wrong people. Clinicians who have actually delivered Population Health at the bedside or in the exam room, rather than individuals who’ve merely read about it, are the better sources for understanding value-based healthcare.

Here’s my proof:

  1. If we define population health simply as lower total cost plus higher quality, and
  2. If we accept the AHIP / NCQA / Consumer Reports data showing which health systems consistently deliver the highest quality outcomes, and
  3. If we accept years of proprietary Aon-Hewitt data or other observations that Kaiser Permanente (KP) produces a 12-25% lower total cost of care than local competitors when benefit-to-benefit comparison is accomplished, then
  4. We can say not only is KP an excellent example of Population Health, it’s been doing it successfully for 75 years, ever since Dr. Sidney Garfield and Mr. Henry Kaiser began prepaid healthcare (Dr. Garfield received 10-cents per week for each employee to prevent and treat illness and injury, improving the lives of those hardworking men and women).

So the assertion by Nate Kaufman and others that population health is vaporware is not supported by the evidence.

How Kaiser Permanente (KP) does what it does is the real insight, the real question.  The how is clearly not easily transferable; otherwise KP’s local competitors would compete more effectively for top honors.

I also hear assertions that how KP does what it does is due to care protocols, or a single enterprise-wide EMR, or that Permanente physicians are employed. In fact there are many delivery systems in the US that have one or more of those attributes, and some that have all three of those attributes, yet their performance is variable.

Instead, I assert that how Kaiser Permanente does what it does is due to physician practice patterns that differ substantially from fee-for-service (FFS) and that those practice patterns are the result of (1) physician leadership, (2) physician culture and (3) systemic workflows that reduce the duration of time between onset of illness and definitive resolution of its cause.

Improving practice patterns is hard for any health system, and real physician leadership is a requisite.  That’s not easily understood by persons who have not led physicians.

Population Health – the (im)precision of language

hospitalNo phrase has less meaning in our industry right now than “Population Health” – this coming from the guy leading his firm’s practice in … wait for it … Population Health.

Everyone has a different picture in their head when those two words leave their mouth, yet that is the industry-standard term nowadays to convey “what comes after fee-for-service (FFS)”.  Here are merely the Top Ten most common meanings in the industry when those words are spoken:

10. Telephoning patients for the purpose of convincing them to consume preventive services

9. Disease Registries embedded in an EMR

8. Convince patients to modify their personal choices (usually via financial-pain or -pleasure)

7. Financial Bonuses to physicians for achieving a numerical score on quality metrics or for following a more complex coding and documentation process

6. Binding together physician practices for the purpose of negotiating higher professional fees (CIN)

5. A software bridge allowing a modicum of data-transfer between different EMRs

4. Buying or building more bricks and mortar to capture more patient care (revenue)

3. Convince patients to undergo biometric testing (patient engagement anyone?)

2. Enforcing the use of Evidence-Based-Protocols for common disease states

1. Providers assuming financial risk or gain for the cost of care provided

Those snapshots represent a small number of available tactics at best, and entirely miss the true meaning of Pop Health at most.  Here’s my definition of Population Health – “the manner in which healthcare design necessarily changes, once it is no longer paid for by piece.”

If the healthcare in question uses FFS as the mechanism for payment, by definition it AIN’T Population Health. The purpose of Population Health is to create higher quality care at lower or similar cost (better care experience, less harm, and more reliably favorable outcomes). In my experience, those better outcomes rarely occur and are never sustained over time, if paid for by FFS, particularly in the absence of group physician practice.

In order for care redesign to be funded and implemented by hospitals and physicians, those providers must be paid for what doesn’t happen: the ER visit avoided because the doc stayed late in the office to diagnose and treat the patient’s UTI; the cardiac cath avoided in the 22 year old with a pulled pectoralis muscle because a history and exam pays the same as cath; an admission avoided because the ambulatory physician did a great job of organizing the patient’s care, such that decompensation never occurred.  Spending time with patients, thinking about them and with them, and coordinating their care all take time, and as we all know, time is money. FFS can only account for what does happen (the ER visit, the admission, the cardiac cath); it’s non sequitur in the context of Population Health.

So the next time you hear the phrase Population Health, ask two questions: (1) “What the hell do you mean by that?”, and (2) “Before we go on, do we agree FFS payment of any type is NOT involved?”

1994 v 2014: deja vu or brand new day?

It’s a good question that deserves a good answer: “How can it be a good idea in 2014 to organize the provision of healthcare within a unified delivery system, then pre-pay for that care (a.k.a., population health), when that strategy failed in 1994?”

  1. Population Health was NOT Tried in 1994.  The business premises for the two eras are different: in 1994, revenue was considered variable and unlimited (recall, 13% GDP), so all provider interventions of the time focused upon increasing revenue: buy the doctor’s practice in order to raise billable events per encounter (e.g., implement in-office ancillary testing), raise encounters per day (e.g., change office workflow so the doc sees more patients per day, while spending less time with each patient), and raise cash collected per event (e.g., rev cycle in its totality).  In 2014, revenue is more likely fixed (18% GDP, likely limited by US macroeconomics, and millions of debt-laden households are unable to take on more healthcare debt).  The macro-economics of 2014 demand our industry lower expense trends per person, rather than raise revenue per healthcare event (1994), which Population Health can and will do.
  2. The Root Causes of High and Rising Healthcare Costs are Now Known.  In 1994 the prevailing wisdom asserted that doctor’s professional fees were the root cause of unsustainable cost trends, which led to the capitation of professional fees for a cohort of patients (short-lived popularity of HMO plans). But as I’ve written before, our industry and my profession have always been more successful increasing the number of units of care, than public and private payors have been in reducing the payment per unit.  Indeed, pro-fees per office visit have fallen by 30% during the last 20 years (in actual dollars), while the number of units of care per person per year has risen more than that (scripts per year, imaging per year, ER visits per year, surgeries per year, etc). Unless and until an entity (think health-system behaving as a true ACO) is pre-paid for all care (population health 2014), rather than just the professional fees (1994), care transformation won’t occur, and we’ll be forced to resort to “rationing” healthcare in the US. I’ve written previously about the effects of FFS and obesity on the country’s cost trends.

Some health systems mistakenly believe they can create the recipe of Population Health by buying everything said to be on the ingredient list: employ physicians – check; implement an EMR – check; create the legal structure of a Clinically Integrated Network – check.  But prepayment of healthcare can be financially successful ONLY if one addresses how those physicians are organized (salaried, group practice, with a patient-centered culture), how that EMR is used (just-in-time decision-support tool to empower shared-decision-making rather than a poorly searchable repository for documentation), and how care is actually coordinated across the continuum (simple, but comprehensive and reliable, communication channels and workflows that close the knowing-doing gap).  If wide-spread prepayment of healthcare is successful in the second half of this decade, it will be as a result of deeply understanding how healthcare cost is created in the moment of decision between patient and provider, then designing highly-reliable workflows and aligned payment systems that begin to eliminate the 30% of waste and overtreatment buried in that 18% GDP.



Stickin’ It to The Man

A rising number of physicians, nearly all of whom are primary care physicians, are moving toward a more pure fee-for-service (FFS) compensation system for their professional fees and simple office tests (e.g., ECG, spirometry, urinalysis), no longer accepting The Man’s insurance payments, and eschewing trends toward non-FFS compensation systems. Of course, this is the model of physician compensation that existed for the majority of America prior to 1965.

stick it to the man - baby

I get what’s in it for the patients who choose to afford the $1,600-3,000 annual retainer fee – same day office appointments, night-time telephone advice, and more time with the doc in the exam room (20-60 minutes rather than 6-10). I also understand the benefit for the docs – more time with patients, a simpler business model, and more time doctoring (rather than dealing with insurance companies). Some report higher incomes too – a result of fewer office staff (less overhead) and higher professional fees (including that annual retainer).

But the following questions occur to me:

1. Have we physicians, particularly primary care physicians, given up on creating those same desirable and justifiable outcomes through other means, particularly authentic payment reform?

2. Have we become a guild of independent business-men and -women, rather than a profession dedicated to public service?

american family - rockwell

3. Will Primary Care soon devolve into a caste system: Americans who can afford a main doctor (concierge practices), versus those who can’t (relegated to see a NP at Wal-Mart for straightforward and low-risk stuff, and the ER doctor-du-jour, followed by a cadre of disassociated proceduralists for all other maladies)?    That is a recipe for Anarchistic Waste if ever there was one.

Give me your answer to those questions (or comments of your choosing) below.

KP 101: Our Future

healthcare reform

WE BELIEVE … American families deserve lower cost, higher quality, and better service in their healthcare. Given our results (KP 101: Our Results) we can be, and should be, the choice of more Atlanta families and individuals going forward. The federally run Health Insurance Exchange (see will link more Atlantans to KP, with enrollment beginning October 2013.


WE BELIEVE … healthcare must be more responsive, more holistic, and more timely than in the past. That’s why we are building even more connectivity between patient and doctor, including mobile apps, TeleHealth, and “just-in-time” health information that empowers patients in their decision-making. We’ll be with you everywhere, not just in the exam room or at the bedside.

mol genetics blue gel plate

WE BELIEVE … diagnostic and therapeutic decision-making will become increasingly tailored to the individual, rather than a population of people similar to you. That’s why we’ve invested millions of dollars in research using genomic and predictive-modeling technology intended to create more precise clinical recommendations for patients and families. After all, it’s about you, not them.

couple walking in woods smiling

Kaiser Permanente of Georgia’s future is very bright indeed, given our best-in-Georgia results, our “Care Everywhere” vision, and our tailored approach to your health, not merely your healthcare.


What Role, Money?

arm wrestlingI had a heated discussion this afternoon with a MAG buddy of mine – a solo-practice orthopedic surgeon practicing in a rural area of Georgia.  He began with “I’m (fed up) with the bashing of fee-for-service (FFS).  There’s no (alternative) compensation methodology that creates similar levels of physician productivity.” And off we went.

The Definition of Physician Productivity.  I’ll send him the link to one of my previous posts (“The Real Definition of Physician Productivity Might Surprise You“), but we agreed that wRVUs can be a part of measuring “work-done”, particularly when comparing the unequal burden of caring for a patient-population with higher levels of diabetes or kidney disease, or lower levels of medical sophistication.  But fundamentally, he defines physician productivity as “things done to patients today”, rather than “patient problems solved today or avoided tomorrow.”

the one word that could save your life

The Role of Money in Determining Physician Work Ethic (or if you prefer, in Determining Discretionary Effort).  My friend firmly believes that money is the ONE, dominant motivation of physician work ethic – that salaried physicians will “work (only) when they want to.”  He went on to say that higher levels of pay will create higher levels of effort.  But I know my friend gives the same level of high effort in the OR when operating on a Medicaid patient as he does when operating on a commercially insured patient, producing an incongruity in his argument.

in money we trustIf not money, then what?  I spoke of group culture (interdependency among and accountability to one another, ensuring reliably high levels of effort by all), and inherent altruism among physicians, but he would have none of it.  For him, those concepts were somewhere between mythology and ideology.  He offered a (not-so) hypothetical case of a little girl with a newly broken elbow presenting to the orthopedic office at 5:01 pm, ostensibly ushered into the FFS office, but turned away by a salaried orthopod.  He was incredulous at my declaration that a given physician’s behavior in such a circumstance would be (ie, must be) dissociated from the presence or absence of compensation.  I never got to plug Daniel Pink’s work.

daniel pink drive

This conversation unnerved me.  Not because I am unlikely to ever change the mindset of my friend relative to the role of money in physician behavior.  And not because of some ridiculous belief we physicians should work for free; I believe physicians should be highly compensated for the high stakes, high intensity, narrow-tolerances of our privileged craft, just not through a FFS mechanism.


Rather, I believe my friend’s point of view is likely reflective of the majority of FFS colleagues.  Thus, our profession is threatened even more than I once believed.  W.W.O.D?

william osler, ca 1890s



KP 101: Our Structure

kp logoDespite being part of the Atlanta community since 1985, and part of the US healthcare community since 1945, most don’t know us. Not really anyway.  That’s no one’s fault but our own. The next three posts are intended to provide a concise description of (1) our structure, (2) our results, and (3) our future.

WE BELIEVE… that physicians should share the decision-making process only with patients and family, unencumbered by the financial interests of self or insurance companies. That’s why we physicians and associate practitioners (the Permanente Medical Groups) are legally separate from the insurance company (the Kaiser Foundation Health Plan). It’s also why we doctors are salaried, rather than paid “fee-for-service (FFS)”, the latter leading to dangerous over-treatment and conflict of interests in America’s healthcare industry. The legal separation of our two entities (Kaiser & Permanente) leads to patient-centered decision-making, rather than decisions that first benefit the doctor, hospital or health plan.

team care

WE BELIEVE… that all voices in healthcare must be heard and accounted for in the design and implementation of the care provided. That’s why we physicians fully include “everyone” (nurses, pharmacists, therapists, technologists, customer-service representatives and patients) when improving what we do. Doing so enables the most effective team-based care for all KP members, reliably tailored to the individual patient.

WE BELIEVE… that convenience and ease are very important in healthcare. That’s why our doctors, pharmacists and radiology staff are located under one roof. Doing so enables all team members to interact with one another easily and effectively, on behalf of the patient, producing more timely and effective care.


Our beliefs are the reason for our structure, intended to best serve our members, now and in the future.

Of Castles and Trebuchets

Throughout history, investing in capital-intensive, fixed-defensive positions has failed as a military strategy.  For more information, see castle v trebuchet, Great Wall v The Hun, Siegfried Line v Patton’s highly mobile Third Army.  Indeed, rapidly deployed, highly flexible Special Forces are working well in today’s warfare, not heavy bombers, rear artillery, or cruise missiles.

castle ruins in scotland near urquhart, better pic

In today’s healthcare, I continue to see capital-intensive, fixed-defensive positions being built, despite our county’s inability to afford such infrastructure, and despite the clinical requirement we relocate our healthcare from single, stationary to multiple, mobile locations.  Oh yeah … the pace of change in the industry is very much akin to the speed of today’s warfare.  For more information, see hospital oligopolies and single-specialty mega-groups, the creation of which is solely designed to fix high prices in a marketplace changing how heatlhcare is paid.

hospital facade, good sam

What if a more mobile healthcare delivery system, made possible by low-cost IT-peripherals and connectivity, was the better strategic choice, both offensively and defensively?  Imagine a patient being electronically “touched” by her physician team 4 times a month for preventive health, wellness, nutrition and disease management, rather than a single office visit + ER visit + collateral costs from inadequately managed DM?  The combined cost of the mobile care and connectivity, driven by true population-based care, would have to be 50% less than the cost of building and maintaining today’s healthcare castles (stone and mortar, guards, wardrobes of kings and queens, maintenance on the moat, etc).

medical informatics doctor

Regardless, we’ve got to get America’s healthcare spend from the current 18% GDP to 12-14% over the next ten years.  That can’t happen if we continue to invest in the capital-intesive anachronisms of fee-for-service (FFS) healthcare.


Avoiding the ER

if disney ran your hospital, cover

Despite being in the very human business of relieving pain and suffering, US healthcare is more criticized for its poor customer service than celebrated for its user-friendliness.  For more information, one can begin with “If Disney Ran Your Hospital” (Fred Lee, 2004).

Ms. Jane Brody, the trusted columnist for the New York Times and best-selling author on matters of personal health for nearly 50 years, recently wrote an incisive piece detailing the inadequacy of care-choices after business hours in traditional healthcare (Avoiding Emergency Rooms, April 15, 2013).

jane brody

Ms. Brody hit all the low points of traditional American healthcare … (1) inability to reach the patient’s primary care physician for a simple matter, requiring an ER visit; (2) hours of waiting in the ER before being examined, (3) incomplete testing in the ER, requiring an otherwise unnecessary one-night admission to the hospital, location of super-bacteria and sleep deprivation, and (4) large financial waste.   She concludes “… the medical profession has thus far failed to adequately fill the gap left by doctors who no longer make house calls or answer the phone 24 / 7 / 365”.

TP ACC driveway approach

Well, we have at Kaiser Permanente of Georgia.

This month marks the one year anniversary of the opening of the first of four “Advanced Care Centers” (ACC).  Our ACC effectively addresses each of Ms. Brody’s criticisms: (1) open 24 / 7 / 365, staffed by physicians and nurses with excellent credentials and years of experience in emergency care, who are electronically and telephonically connected to the patient’s physician and her/his partners, (2) prompt and accurate diagnosis and treatment (time from walk-in to walk-out usually less than 2 hours, rather than the 4-6 [or more] in an ER), (3) a full complement of testing capabilities, including lab, imaging, telephonic specialty care AND if needed, quiet, comfortable, sparkling rooms to spend the night in the care of a hospitalist-physician, (4) at a cost lower than an ER copay/visit.  The nearly 2,000 patients per month that use our Kennesaw ACC have been delighted with the quality and service.  The second ACC will open in January 2014 at our Southwood campus in Jonesboro.

ACC room

As Ms. Brody says, “The overuse of emergency rooms is a growing and increasingly costly problem that results in overcrowding, long waits, overly stressed health professionals and compromised care for people with true emergencies”, the latter of which accounts for only 25% or less of patient visits to most ERs.  At KP, we are proud to be The Face of Future Care (see my previous blog post of this title).  TP ACC nurses station

Someone should tell Ms. Brody.