Ascension Health, Trinity form managed care contracting company Together Health System

Ascension Health Michigan and CHE Trinity Health Michigan-two of the largest health systems in Michigan-have formed a separate clinical care company to create a network with 27 hospitals, more than 12 physician organizations and 5,000 physicians for joint managed care contracting, according to Crain’s Detroit Business. The new company, Together Health Network LLC, will become one of the largest clinically integrated networks in the nation.

In a key aspect of the transaction, Together Health Network LLC will not require federal or state antitrust approval because it is not an asset merger.

“Given the fragmentation within the healthcare system, coordination of care between providers has both economic and quality benefits,” says John Santilli of Access Market Intelligence, which provides market intelligence to the pharmaceutical and healthcare industries. “The formation of a clinically integrated network to accommodate the care delivery changes within health reform is a major system transformation. Existing clinically integrated networks have been limited in scope and ability to contract because they have primarily not been physician-led.”

Over the next several months, Together Health Network will hire a physician CEO and appoint a 15-member board with nine physician members, four Trinity and Ascension managers and two community members.

Physician organizations affiliated with Ascension and Trinity in Michigan will be invited to voluntarily join the new organization.

“The structure of Together Health Network LLC will allow the organization to offer new health plan products to health insurers and employers,” Santilli says. “Together Health Network LLC will also be able to participate in the growing exchange marketplace.”

According to Santilli, Together Health Network LLC will develop managed care contracts that include shared savings arrangements, pay-for-performance based and global budgets-with bundled payments around procedures with narrow provider networks.