Setting the record straight: physician networking is an effective strategy

Case studies of 11 leading integrated delivery systems (IDSs) disclose that, despite the widespread perception that integrated health care--and particularly the acquisition of physician networks--is a failed strategy, integration can be a vibrant and effective strategy if approached properly. The successful case-study IDSs have certain attributes in common: many were founded by multispecialty clinics; they involve physicians in a partnership role with administrators; and the primary purpose of their physician networks is to offer patients convenience and broader access to the system, rather than simply to increase referrals to the hospital or to compete for capitation contracts. Moreover, all of the IDSs are actively pursuing measures to improve the financial performance of their physician networks, including closing marginal clinics, improving economies of scale, adding ancillary and specialty services, seeking administrative procedures, and enhancing information technology capabilities.