Clinically Integrated Network Strategy and Role of Physician Leaders (Coach Series, Part 3)

By Daniel K. Zismer, PhD
January 30, 2018

Physician leaders should be closest to the organization’s brand promises involving patient care, and so are best positioned to understand and call attention to whether the system delivers.

Like a coin, health system strategy has two sides. On one side are the expected results of strategy, on the other side are the enterprise risks inherent in the execution of this strategy.

Because most U.S. health systems are under pressure to perform at increasing levels of financial productivity, the execution of strategy may be pushed to beyond reasonable limits, exposing organizations to excessive levels of enterprise risk. The result of strategy pushed too far can be devastating.

Physician leaders are (or should be) closest to the system’s brand promises involving patient care, and so are best positioned to understand and call attention to whether the system of care delivers on brand promises.

Brand promises can go wrong, risking patients’ and the health system’s well-being. Physician leaders and care-delivery colleagues are closest to how strategy can (and does) go wrong.

Know How and Whether Your System Can Deliver on Promises

A system we’ll call Community Health System, or CHS, executes a multimedia brand campaign to attract profitable patient markets. The central messages of the campaign (print, billboard, television and radio) are:

  • Ready access 24/7.
  • A coordinated clinical care experience delivered by a network of affiliated and collective providers.
  • State-of-the-art clinical technologies and facilities.
  • An integrated electronic medical record.
  • Evidence-based clinical best practices.
  • Personalized and compassionate care.
  • Highest qualified physicians and other licensed providers.


This six-part series by Daniel K. Zismer, PhD, introduces an important competency and prepares physician leaders to function at the intersection of health strategy and enterprise risk. It was originally published by AAPL in 2016.

Part 1: Managing the Productivity of Enterprise and Risk Strategy

Part 2: Accountability for Health Care Leaders as Officers

Part 3: Clinically Integrated Network Strategy and the Role of Physician Leaders

Part 4: Operating Economics of Employed Providers in Integrated Health Systems

Part 5: Due Diligence and Integration

Part 6: Brand Campaigns, Brand Promises, and Enterprise Risk

The Jones family moves to the community, is impressed by the brand advertising campaign and joins the CHS primary care network.

Mrs. Jones schedules a first appointment for an annual physical exam with a primary care physician employed by CHS. During the initial visit, Mrs. Jones complains of shortness of breath, times where her heart skips a beat and fatigue. Her physician makes a referral to a cardiologist, with whom he went to med school. Mrs. Jones receives a timely and satisfying first appointment with the cardiologist. After scheduling several office-based diagnostic texts, the cardiologist tells Mrs. Jones he would be more comfortable if she sees a pulmonologist, another med school classmate of the primary care physician.

The cardiologist and pulmonologist collaborate on the care visits and related diagnostic test results and determine that an electrophysiology diagnostic study may be in order. The cardiologist consults a referral specialist at University Medical Center. These referring physicians are not employed by CHS. None operate on the CHS electronic medical record and one of these physicians is not “in network” for the patient’s insurance. As far as the patient knows at this point in the care process, she is being cared for by CHS doctors. While nothing untoward has happened yet, what should the patient know, or at least expect to know, based upon the health system brand promise?

Physician leaders need to translate explicit or implied brand promises into their organization’s provider network’s ability to deliver, and they need to know how it behaves in managing patient referrals through the provider network.

Physician leaders need to understand the array of providers the health system is delivering as its network. A full understanding is multilayered, driven by a few fundamental questions:

  • To what extent can the system deliver on the full health needs of the strategies’ target populations? How many providers of what specialties are required to meet the total forecasted service demand of the target population if the strategy succeeds?
  • Is the required provider profile available within the network and is required capacity available, given the access availability implied by the brand promise campaign?
  • What is the nature of the physician affiliations in the network: employed, contracted or hospital medical staff only? To what extent are independent physicians, who are not in-network physicians, available as referral physicians?
  • Are all promoted physicians on a common EMR and, if not, what might that mean?
  • To what extent do independent physicians own ancillary services and what are their freedoms to use them for the system’s patients?
  • Do employed referring physicians understand the full implications of referring inside and outside the system’s complement of employed physicians, including all financial implications, and how are these implications communicated internally? Are there risks in related referral management, reporting and communications methods?
  • How do financial arrangements and incentives operate within the clinical network, including across various types of network affiliation agreements?
  • Who retains what responsibilities and accountabilities for quality, safety and total costs of care for all providers across all methods and models of clinical network affiliation?
  • For the employed physicians within the health system, to what extent can system-controlled sites deliver on the brand promise; especially related to access, urgent care, first primary care visits and first visits to high-demand referral specialties?
  • Do compensation models and methods align well with the brand promises made by the system?

Physician leaders of systems who may be pursuing more aggressive market brand strategies and promotional campaigns must address those questions and more.

Owned Primary Care Sites and ED Referral Rate Variation

In a second example, let’s say CHS owns and operates 30 primary care satellite sites housing 275 primary care physicians. All physicians are employed (all except those doing part-time contract and locum tenens work; about 25 at any given time). All sites operate under the CHS clinic brand.

Each enjoys the latitude to self-design its same-day appointments, related access management plans and methods of on-call coverage.

The system’s largest commercial payer reports significant variation in emergency use rates among system-owned primary care clinics (see Figure A).

The annual use rate per 1,000 ranges from a low of 97.1 to 145.5 (a 49.8 percent difference, low to high).

All sites in the sample are general, primary care providers. All patients are adults insured by the same payer. At this first level of analysis and reporting, there are no significant differences in patient populations served.

The physician network’s leader meets with other physician site leaders. Site leaders were not aware of the differences. There is no obvious explanation because a cursory internal examination of patient demographics reveals no apparent differences. Examination of differences in diagnoses and health status is required. What is obvious are differences in how sites manage:

  • Same day appointments.
  • Interprofessional team care models.
  • Coverage for physician time off.
  • Hospital rounding.
  • Office hours management.
  • Physician/provider compensation models.

If patient health state and status is not a reliable predictor of emergency department use rates, then variation on clinic site operating philosophies, culture and care delivery models must be considered, because the variation in total cost of care is considerable, expensive and on the radar of the health system’s most important commercial payer.


As health systems expand their network strategies using employed and affiliated providers, the array of arrangements will impact patient care, especially as patients are encouraged to move in, through and out of the network to receive care.

Physician leaders need to be aware of the affiliation devices applied, including employment. Understanding how affiliation arrangements facilitate or impede care and how they affect the incentives of the care process are important.

Physician leaders are encouraged to take the perspective of the patient to the extent that brand strategies of the health system will affect patient expectations, including expectations for access, coordination of care, intranet work provider communication and information sharing.

Patients are likely to assume that all providers are “on the same team” because the brand promotion campaign sells this expectation. Consequently, patients are blind to (and should be blind to) the devices and mechanisms used to create and manage the network. The way they will know is whether it works.


Daniel K. Zismer, Ph.D, is a founder and managing director of Castling Partners, a consultancy focused on strategy performance and integrative risk management for health care organizations. He has a 30-year career in the leadership of health care organizations and executive education. His area of specialization is strategy and the performance of strategy. He is the Wegmiller Professor Emeritus, School of Public Health, University of Minnesota Programs in Health Care Administration. 

Topics: Leadership

Are You Really Listening?
The Blackwell Sisters: Physician Leadership and Courage