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Health Care Organizations Are Focused on Growing Their Physician Networks

By The SHSMD Team posted 07-16-2019 10:10 AM

  
Medical professionals walking down a hallway

Written by Amir Dan Rubin

In light of the changing health care environment, there is a growing trend toward health systems aligning with doctors and growing their physician networks.

In fact, the latest Society for Healthcare Strategy & Market Development Futurescan survey of health care leaders across the country found that 76 percent of respondents are expanding their networks by more than 25 percent or are likely to do so by 2024. Additionally, 75 percent indicate they are operating their networks at a loss or are willing to do so to achieve broader strategic objectives, such as:

  • Aligning more attributable lives with their networks.
  • Delivering higher levels of service, access and value-based care to consumers, employers and payers.
  • Preventing providers and their associated patient bases from becoming aligned with competing networks.


A Variety of Approaches
To expand their networks, health systems are pursuing a number of approaches, including “making” a network by launching medical groups and medical foundations, buying physician practices and hospitals and constructing medical office buildings and outpatient centers.

These approaches tend to require significant investments in acquisitions, equipment, facilities, technology, operations and management. Other network development strategies include contractual alignment models such as clinically integrated networks (CINs), independent practice associations (IPAs) and provider-sponsored or joint-venture health plans. Although these options can mean less up-front funding for bricks and mortar, they typically require substantial investments in leadership, technology and risk-based capita. They also involve riskier contractual arrangements.

New Entrants

The market is also seeing new ambulatory care entrants innovating to deliver higher levels of service and access to meet the rising expectations of consumers and employers. Such entrants can more nimbly develop customized technology and realigned economic models without being encumbered by the complexities of running entire hospitals or health systems.

Trend Toward Partnerships

Increasingly, health systems are acknowledging that trying to meet the evolving needs of consumers, employers and physicians on their own is an insufficient strategy. Accordingly, they are finding that an effective way to serve customers with the highest level of choice is partnering with innovators who can develop aligned networks faster and at a lower cost and can integrate them into health care organizations through affiliations.
For example, health systems have been developing relationships with large primary care groups such as One Medical (where I serve as president and CEO) to further advance their networks through direct-to-employer and consumer-driven strategies while minimizing their capital expenditures, business risk and time to market.

Providers have also pursued network-extending relationships with operators of urgent care centers, surgery centers, freestanding emergency departments, diagnostic testing facilities, telehealth companies and drugstore retail clinics. These partnerships and affiliations may take many forms, including professional service and management service agreements, lease arrangements, joint ventures, CINs, cost-plus contracts, fee-for-service and salaried physician models, IPA relationships and capitated or accountable care organization-like arrangements. Many health care organizations also find that these options can spread capital burdens and business risks as all partners commit resources and management energy.

Successful physician aggregation partnerships require alignment on goals, thoughtful assessments, fair contractual terms and ongoing relationship management, and they should be built on both mutual success and mutual trust.

To learn more...

Read the article “Health Systems Partner to Grow Consumer-Driven Physician Networks” published in Futurescan 2019: Health Care Trends and Implications, a publication developed jointly by SHSMD and the American College of Healthcare Executives.

This blog and the above referenced Futurescan article were written by:
Amir Dan Rubin
President and CEO
One Medical
San Francisco and New York Headquarters
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