Integrated Delivery Networks and the Transformation of Health Systems
Integrated Delivery Networks (IDNs) are shaping and transforming health systems in response to the evidence of increasing healthcare costs and the shift to value-based care. IDNs and provider networks are now important players in the US healthcare system.
IDNs can potentially change physician treatment behavior, allow industry manufacturers to reach hundreds of affiliated providers at once without interacting with them individually, and reduce costs.
What is an Integrated Delivery Network (IDN)?
Integrated delivery networks, or IDNs, are health systems that aim to integrate healthcare organizations with disparate missions and often fragmented systems. These networks include hospitals, physical therapy groups, health clinics, post-acute services, ambulatory surgery centers, and imaging centers and are organized in vertical integration.
Some IDNs also offer health insurance and are often called “payviders” as a result since they are both a provider and a payer. Their main objective is to increase profitability for both organizations, bring higher quality care to patients, and reduce financial risks.
Examples of payviders are California’s Kaiser Permanente (with over 11 million members), Pennsylvania’s Geisinger Health System, and Ohio’s Cleveland Clinic.
Why Are IDNs Important in Healthcare?
The increasing cost of healthcare in the United States is the reason for the importance of IDNs. According to the CDC, six out of ten adults in the US have a chronic disease, while four in ten adults have two or more.
The leading causes of death and disability in the country are heart disease, cancer, and diabetes, and the healthcare ecosystem accounts for an annual amount of $3.8 trillion.
Integrated health services can develop strategic decisions to mitigate and reduce costs of chronic disease care while improving health care services. IDNs can use their vast network of healthcare providers to coordinate patient care and deliver high-quality services to different communities.
Greater communication and collaboration between all health system levels can avoid network leakage and prevent revenue loss.
40% to 70% of providers are affiliated with IDNs and provider networks (PNs), and 30% to 70% of healthcare facilities are owned by them, while the geographical spread varies significantly. IDNs account for more than 1,000 in the US and several thousand provider networks.
The 200 largest IDNs:
- Own at least 80 facilities
- Have more than 500 affiliated providers
- Generate tens of thousands of claims annually
How Did IDNs Begin?
The Affordable Care Act accelerated the integration of delivery systems pushing accountable care and clinical integration in hospital systems and health plans.
As Accountable Care Organizations (ACOs) started to form, the shift from volume to value helped focus on cost management, controlling patient populations, and offering holistic care.
Two examples of the earliest IDNs are the University of Pittsburgh Medical Center and Baylor Scott & White Health.
What Is an Accountable Care Organization (ACO)?
An Accountable Care Organization (ACO) is a form of IDN. Its mission is to connect healthcare professionals and hospitals and provide coordinated care to patients as a way to limit unnecessary spending. It was created as a Medicare payment model and is now a part of private payer models.
The ACO is focused on optimizing care quality using data and best practices to reduce duplication of medical services, optimize preventive care, and coordinate services across the care continuum. They work mainly in primary care, but they can incorporate specialists, hospitals, nursing homes, and other facilities.
IDN Integration Levels
All health systems can be categorized into the following IDN integration levels:
- System II (Horizontal Integration). Multi-hospital systems, either regional or national. Even though these networks primarily own and manage hospitals, they can sometimes include additional healthcare facilities.
- System III (Vertical integration). They include a wide variety of care facilities, from prenatal care to hospices and assisted living facilities. Their main objective is to share information and resources across all care facilities equally.
- System IV (Strategic Integration). Also vertically integrated systems, they go the extra mile regarding the organization and strategy of internal structures. All information systems are aligned across all facilities within the network.
Most Common Traits of Large IDNs
Large IDNs often share the following five traits:
- Market control and regional presence. The largest IDNs dominate a regional market, and they can reduce costs when negotiating with payers, drug manufacturers, and suppliers.
- Optimal clinical integration. Protocol adherence and patient outcomes are optimally evaluated by providers in the IDN with shared electronic health record systems.
- Provider alignment development stage and physician data. Large IDNs have centralized control of physicians and common branding across facilities in the region.
- Continuum of care. They can offer additional services, from preventative and urgent or primary care to various therapies, treatments, and post-acute care.
- Better reimbursement. Large IDNs can also accept risk with payers to push for better patient outcomes. They often have payer contracts and can influence physician and patient behavior with specific treatments and protocols.
Population health refers to the health of a particular region, considering the overall health and how it varies within a particular group. Integrated Delivery Networks can assess the specific needs of the local population and focus on the most prevalent health issues in their communities.
These networks are able to coordinate and improve the best practices of a collection of hospitals and other facilities to better monitor patient population health, and one of the essential benefits is healthcare cost reduction.
The Future of IDNs
IDNs are here to stay, continuously gaining influence over practice and prescribing patterns. It is no longer a question of whether a manufacturer should collaborate with Integrated Delivery Networks on HEOR projects.
The future of healthcare delivery in the United States is at a turning point since the economic pressures and unprecedented rates of medical innovation demand a higher quality of services and optimization of every dollar spent.
Fragmented and disorganized healthcare systems will find a difficult time improving patient outcomes at lower costs.
It’s clear that IDNs and “payviders” will continue to grow, and will play a significant role in the healthcare industry’s future.