by Brian Eike

Challenge

A large, multi-specialty clinic in the Pacific Northwest recognized that changes in the healthcare system were threatening the long-term viability of physician-owned practices. Health plans were pushing risk to providers while increasing expectations of them; hospitals were consolidating and employing physicians; and practice management organizations were aggressively acquiring provider groups. At the same time, employer groups were driving lower reimbursement levels in their efforts to control costs, and consumers were demanding higher levels of service. 

From strategy to capital

To address market pressures and ensure high-quality care, the clinic decided to develop a clinically integrated network (CIN) of independent physician practices. The CIN would secure contracts that reward practices for delivering high-quality care in an efficient manner and help physician-owned practices thrive in the new environment.

The clinic knew it needed help navigating the complexities of creating a CIN. It sought legal advice from consulting attorneys and looked to Point B for program management support. The clinic also recognized that there would be significant implementation costs and limited financial returns. They pressed forward, knowing it was the right thing to do for their patients, but realizing that they would need capital investment partners.

Point B worked with the clinic’s leadership team and legal counsel to develop a business plan outlining the CIN governance, model of care, analytics tools, clinical and operational needs and financial projections. We engaged two capital investment partners with aligned interests—a local physician-owned mutual company providing medical professional liability insurance, and a large health plan. In addition to capital, each party brought other valuable contributions to the venture: the mutual company brought physician insights and provider group relationships; the health plan brought its product and network support as well as its analytics expertise.

Positioned for success

Point B supported a steering committee for the CIN. We created a solid business plan and compelling case to attract other provider groups, health plans and, eventually, patients. We also raised the capital to cover implementation costs and those initial years when the CIN will have a negative cash flow. We signed letters of intent with five clinics to participate in the CIN and are ready to reach out to other clinics and health plans. We developed committee charters and drafted a provider group participation agreement. The clinic and its partners are prepared and eager to launch new, enhanced care management capabilities that improve quality, reduce total cost of care, and demonstrate the value of physician-owned practices in the Northwest.