Clinically Integrated Network Wants to Collaborate with Payers

One of the chief goals of the Vanderbilt Health Affiliated Network is to encourage competitive state markets for commercial health plans. "We want to have providers and payers actively collaborate to provide patients with high-quality, efficiently coordinated, and cost-effective healthcare services," says its executive director.

"See Seven States!"

That's one of the slogans motorists in the Southeast see painted on countless barns and billboards advertising Rock City Gardens, a tourist destination just south of the Georgia border from Chattanooga, TN. The ad claims that on a clear day, visitors can see parts of up to seven states from the top of Lookout Mountain, where Rock City is located.

It's a highly dubious claim.

But from a strategic perspective, Nashville-based Vanderbilt Health Affiliated Network is drawing on a foundation of physician-driven population health management to establish a vision among the region’s top healthcare providers to improve the quality and cost of care across the region. The network is the largest provider-organized network of doctors, regional health systems, and other healthcare providers in Tennessee.

A key tenet of VHAN is to provide organizations with the chance to collaborate to improve the delivery of healthcare while maintaining their independence. VHAN’s executive director, Mark Cianciolo, says with healthcare going through a rapid period of change, VHAN is committed to supporting providers in developing innovative solutions to support the transformation close to home.

Why a regional network? In Tennessee alone, the network consists of 11 independent hospitals or health systems and more than 50 hospitals overall. As it stands, VHAN consists of a group of doctors, health systems, and others that actively collaborate to provide coordinated and high quality healthcare services to people who access care within the network.

Cianciolo says that in some ways, VHAN is working with other health systems to determine how to organize healthcare locally while participating in statewide or regional opportunities to collaborate with employers and payers to provide high quality care and reduce purchaser costs.

But at minimum, the network will scale some back-office functions to support using a common technology platform as well as other agreements that will realize economies of scale where possible.

Competition Encouraged
One top strategic goal is to create a more pro-competitive and collaborative environment for commercial health insurers. Cianciolo says that without true supportive leadership, healthcare providers will miss the opportunity to align the interests of physicians, hospitals, and payers to improve care for patients and the communities that they serve.

"The economic well-being of our region is dependent on communities that have strong education and healthcare to support a vibrant business community," Cianciolo says. "A large part of why we came together was really to keep the payers interested by aggregating enough of a population—enough lives—that the state and national insurers stay interested in collaborating with providers to improve the health status of our communities across the region. Together, we can tackle the health challenges of the mostly rural South. We have similar populations in terms of health issues—including a higher incidence of obesity and diabetes."

These chronic conditions contribute to the South’s ranking in the seven of the bottom 10 states for health as rated by the United Health Foundation. Not exactly a great foundation for health insurance companies, but possibly a great opportunity for collaboration with VHAN to improve health, thus demonstrating value.

Rural America is Hazardous to Your Health

The idea is that the VHAN allows local relationships and local decision-making, especially clinically, to be maintained while saving money on duplicative back office functions. It also creates a vehicle to manage the health of a population or many different populations through population health management capabilities and even, quietly, through benefit services for both fully insured and self-insured employers.

"It is about managing populations in the future," says Cianciolo. "For an insurer, the cost of acquiring a life is significant if you're in rural markets. You can't just go to a big city and get a small portion of market share."

Besides that, Cianciolo adds, in many of these markets, you start with a sicker population that already has high utilization rates. Often, without a mechanism to bundle patients (for lack of a better term) to create a larger population under the same care management protocols, you end up with suboptimal solutions.

"So if you're one of the state or national insurance companies, we want you to stay invested in the region," Cianciolo says.

Cianciolo says that if VHAN is able to aggregate lives, as is its plan, and if it can create opportunities to work together for certain purposes, VHAN can keep payers’ interest.

"We've been having discussions with the CEOs and CFOs of some large payers, and I think that it makes sense to them if you can bring half a million lives aggregated across these markets," he says. "Then, we will have a chance to have very different opportunities to collaborate and provide innovative, cost-effective solutions.