- What are the features of CINs?
- How are health systems using CINs to compete in crowded health care markets?
- What potential problems do CINs present for the FTC and the larger health care community?
In response to the Patient Protection and Affordable Care Act, health care organizations have sought ways to increase efficiency quickly, improve their ability to coordinate care, and enhance patient outcomes as reflected in publicly available performance measures. One such response has been the emergence of the clinically integrated network (CIN), commonly defined as a group of health care providers that join together to improve patient care, reduce costs, and demonstrate market value.
The Federal Trade Commission (FTC) and U.S. Department of Justice have jointly provided guidance for CINs to determine whether cooperation among these otherwise competing organizations to jointly negotiate fees runs afoul of antitrust law. However, little is known about whether CINs conform to FTC guidance. The FTC does not formally monitor CINs, and health systems wanting to establish a CIN are not required to seek FTC approval. As a result, CINs are basically invisible to regulators and health services researchers, although CINs have the potential to produce negative market effects, such as increasing prices without a corresponding increase in quality.
In this report, the authors offer an initial assessment of CINs based on interviews with health system executives, describe how health systems (large and small) are using CINs strategically to compete in crowded health care markets, and identify why CINs bear watching by the FTC and the larger health care community.
CINs are a significant but under-the-radar feature of health care markets
There is no standardization of how CINs are structured or function, and there is only theory, but no evidence, of a positive effect on quality. CINs bear watching because their effects on price and quality are potentially as important as the effects of mergers and acquisitions.
Until now, almost nothing has been documented in the empirical literature that addresses the how and why of CINs
Prior literature provides evidence of the existence of CINs but offers nothing in terms of what they actually look like on the ground.
CINs are potentially a way for health systems to improve their negotiating leverage with payers, which should be a cause of concern for the FTC and the larger health care community
Health care consolidation via merger and acquisition is considered a threat, but it is possible that the threat is actually greater than recognized if less-visible affiliations (such as CINs) also threaten to drive up health care costs.
In theory, quality should improve with the alignment of health care organizations, but there is no evidence to support the assertion that CINs are improving quality
If we do not monitor CINs, and if researchers cannot even document in secondary data that they exist, how can we hope to evaluate whether a potential increase in prices is offset by better quality of care?