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Aligning a Hospital and a Major Primary Care Group


A three-hospital integrated health system in a highly competitive market


To align a large, independent group of primary care physicians with a hospital-employed physician network to create seamless patient care, enhance quality and lower costs.


Veralon identified several options that the health system could use to increase alignment with the independent group. Options ranged from more lease and joint venture options to full primary care integration. To determine the most attractive options, we interviewed representatives from both entities, then assessed each alignment option against the goals and considerations generated from the interviews. We also identified cultural differences in the two organizations and developed strategies to address them.

Then, in a facilitated session with both parties, the participants evaluated the feasibility of each option, concluding that they would pursue an integrated primary care network supported by shared clinical data and payer partnerships.


To help evaluate the financial feasibility of this effort, Veralon developed a financial model to estimate the potential savings that the entity could generate by engaging multiple commercial and Medicare Advantage insurers in pay-for-performance or other incentive arrangements. These estimates were compared to care management and information technology expenses required to build the new relationship. This model showed that the partnership could produce significant financial and strategic benefits.

The participants initiated efforts to redesign care, measure clinical outcomes, and pursue new arrangements with payers, including launching a Medicare ACO, to obtain additional payments and data to support this strategy.