“It's all to try to figure out, how do we get access to broader patient populations?” said Bruce Johnson, vice chairman of the healthcare practice in the Denver office of Polsinelli Shughart. He likened the looser agreements to “dating before getting married.”
Yet unlike the deal in Iowa, the BJC Collaborative doesn't include any immediate plans to enter into accountable care organizations or negotiate joint contracts with payers.
“We're really focused on the expense side of the organization,” BJC's Lipstein said. “And to be more specific, we're focused on the non-labor expense side.”
BJC has already formed an ACO and is participating in the Medicare shared savings program. And CoxHealth operates its own health plan and has been experimenting with risk-sharing models.
While St. Luke's might explore an ACO in the future, “that's really not our focus,” Estes said.
Dave Atchison, president and CEO of financial services firm Ponder & Co., noted that it is “legally and practically safer” to have a collaboration that focuses on expenses rather than on revenue, with the latter requiring a change in legal structure while the former does not.
Johnson similarly noted that there are fewer antitrust concerns when a deal involves back-office integration rather than an arrangement that would allow the systems to negotiate salaries or pricing.
“(The systems) would either need to become financially integrated or clinically integrated to negotiate contracts with payers,” he said. “It makes sense that they're not pursuing that today.”
Still, he noted, “It wouldn't surprise me if over time they considered trying to share risk.”
Yet Cassels noted that the collaboration can still achieve some of the goals of population health management without having a formal risk-sharing agreement. For instance, he pointed to the ability to use clinical data to find cost savings, such as analyzing variations in care for specific conditions.
“That's the type of thing that actually drives the functional cost savings,” he said, adding that a deal's structure is less important than these types of functional integration activities.
Edwards of CoxHealth similarly emphasized that the collaboration is about more than just trying to find cost savings. “We think there's greater opportunity in talking about clinical innovation,” he said, adding that CoxHealth, for instance, could share best practices for how it achieves its low readmission rates. “Each partner has lessons to share.”
TAKEAWAY: Hospitals and systems not ready for the commitment of a merger may find benefits in looser alliances.