Vanderbilt University Medical Center Forms Nation’s Largest Clinically Integrated Network that includes Its Own Health Insurance Offering

Clinically integrated networks is one market trend in response to shift away from fee-for-service payment and toward value-based provider reimbursement

One fast-developing trend is that of academic centers forming integrated networks with various providers within a community and a surrounding region. This is related to a movement to establish accountable care organizations (ACOs). But it is also a response to actions by payers to narrow their networks and exclude high-cost providers, such as academic centers.

This business model has a mutual goal. Each integrated network is anchored by an academic medical center and is designed to foster closer interaction between the academic subspecialists and the wider clinical community. For pathologists and clinical lab managers, such integrated provider networks may often encourage participating physicians to send their reference and esoteric medical laboratory test referrals to the academic center and not to the physicians’ primary laboratory provider.

Vanderbilt UMC Is Building a Clinically-Integrated Network

In Nashville, Tennessee, Vanderbilt University Medical Center  (VUMC) is assembling what has been described as the nation’s largest clinically integrated network. VUMC is comprised of five hospitals, an outpatient clinic, and a cancer center. It has formed the Vanderbilt Health Affiliated Network (VHAN). There are 31 affiliate hospitals in VHAN, which offers a health plan for the region’s self-insured employers that is serviced by the network.

VHAN includes nonprofit hospitals and their numerous outpatient sites in Tennessee, Virginia, North Carolina and Kentucky. Thousands of clinicians, independent physician groups, and insurers Blue Cross Blue Shield of Tennessee and Aetna are also participating in VHAN.

Combinations of Providers Team Up to Deliver Added-Value Healthcare

Odd combinations of healthcare providers—academic medical centers, community hospitals, physicians, insurers, and ancillary health services—are teaming under the umbrella of clinically integrated networks (CINs), like VHAN. This is one way to prepare for implementation of healthcare reform and associated changes in Medicare and Medicaid reimbursement policies.

Driven by the Affordable Care Act’s (ACA) changes in reimbursement policy, various providers are working together in anticipation of the coming shift away from fee-for-service and toward reimbursement models that reward quality and value. The ACA embraces the notion that a value-based and coordinated-care model will produce the best alignment of incentives to eventually bend the cost curve.

Network Affiliates Retain Independence but Gain Vanderbilt Expertise

In VHAN, all parties signing affiliation agreements with VUMC remain independent. They are free to continue pursuing individual initiatives even as they participate in the health plan network. They can collaborate on programs and services aimed at forging new solutions to improve the quality and lower the cost of healthcare in the region. These activities include:

• Sharing best practices in the areas of evidence-based care models;

• Collaborating in the areas of medical research and clinical trials;

• Developing consultative relationships among specialists and subspecialists;

• Working together in the area of physician recruitment to facilitate access, especially to specialty services;

• Collaborating clinically, with particular emphasis on cardiovascular and oncology services; and,

• Working together to develop a statewide CIN to contract with payers for high-quality, efficiently provided healthcare services.

How Provider Networks May Impact Clinical Labs and Pathologists

There are two primary reasons why both ACOs and CINs will change how medical laboratories serve their physician clients. Both reasons have been discussed in earlier e-briefings published by Dark Daily.

First, the primary organizers of ACOs are hospitals and healthcare systems. That is because they have access to the capital and management resources needed to organize and operate an ACO. For the same reasons, ACOs organized by these institutions are likely to want their hospital laboratories to provide lab testing services to the ACO’s providers.

Second, many hospitals and health systems actively forming ACOs are aggressively acquiring physician group practices in their service area. These physicians are willing sellers because they recognize that the era of fee-for-service medicine is about to end. That will make it much tougher for independent, physician-owned medical groups to operate in a financially sustainable manner. And, for the same reasons as noted above, laboratories operated by hospitals participating in the ACO will have an advantage over independent labs in capturing referrals of office-based physicians who sell out to hospitals or health systems and become their employees.

New Clinical Opportunities for Clinical Labs and Pathologists

At the same time, ACOs and CINs can create new opportunities for clinical laboratories and pathology groups. It will be necessary for labs to develop value-added clinical services that go beyond simply performing a lab test and issuing a report on a timely basis.

For example, primary-care physicians operating within an ACO have a pivotal role in diagnosis and treatment of patients. The ACO’s goal is to provide early diagnosis, then proactively manage the patient’s case. Pathologists and laboratory professionals are qualified to assist physicians in development of clinical pathways and provide clinical consultations that measurably contribute to improved patient outcomes at a lower cost per episode of care.

—by Patricia Kirk

Related Information:

Mountain States to join Vanderbilt network

Mountain States Health Alliance announces affiliation with Vanderbilt University Medical Center

Accountable Care Organizations (ACOs) Expected to Encourage Appropriate Use of Clinical Pathology Laboratory Tests