CONTENTS

6 EXECUTIVE SUMMARY

6 Key findings

8 CHALLENGES IN HEALTHCARE
8 Changing population demographics
9 Increasing prevalence of chronic disease
10 Medical innovation is also driving healthcare spending
11 Pressure on funding
11 Bibliography

13 PAYMENT PRESSURES: IDNS AS A SOLUTION
13 Focus on value is driving creation of new healthcare entities
13 New healthcare entities are a result of the shift towards consolidation
15 Integrated delivery networks: A definition
16 The benefits of IDNs
17 Streamlining the healthcare pathway
19 Measuring the performance of IDNs
20 Other integrated healthcare structures
22 Bibliography

25 THE GROWTH OF IDNS
25 The number of IDNs is growing
25 The top IDNs: facts and figures
30 Examples of IDNs
40 Bibliography

43 IDNS’ FOCUS
43 Preventing chronic disease
44 Caring for diseases of older age
45 Managing the costs of high-intensity care
46 Supporting patients through transitions in care
47 Finding the best care for patients: specialist and community cancer care
51 Bibliography

53 IDNS AND MEDICINES MANAGEMENT
53 The role of formularies in IDN cost cutting
54 Working with specialty pharmaceuticals increasingly important for IDNs’ cost containment
55 IDNs’ effective medicines management can improve adherence and cost
56 Bibliography

58 IDNS ARE MAKING AN IMPACT ON PHARMA STRATEGY
58 IDNs require a different pharma sales model
60 Pharma needs to employ a tailored and coordinated approach to meet the IDN challenges
68 Bibliography

LIST OF FIGURES
9 Figure 1: Estimate of the global population, by age, 1950–2050
10 Figure 2: Proportion of the drug budget taken up by new medicines in the US and Europe, 2006–21
15 Figure 3: Publicly announced physician group mergers and acquisitions, 2011–15
26 Figure 4: Top 25 IDNs ranked by total number of facilities
27 Figure 5: Total number of doctors (doctors of medicine and doctors of osteopathic medicine), by facility
28 Figure 6: Total number of medical offices and groups, by facility
29 Figure 7: Total number of nursing homes, by facility
31 Figure 8: Community Health Systems net operating revenues, 2011–16
32 Figure 9: Kaiser Permanente health plan membership, by region
33 Figure 10: Kaiser Permanente healthcare professionals and other staff (approximate figures)
34 Figure 11: Kaiser Permanente annual operating revenue, 2008–17 (projected)
35 Figure 12: Geisinger Health Plan membership
36 Figure 13: Number of visits and admissions in 2015 for the Geisinger Health System
40 Figure 14: Patients cared for each day at Providence Health & Services (2016)
44 Figure 15: Integrated care’s potential impact on management of disease according to physicians’ opinions (by therapeutic area)
48 Figure 16: Increases in volumes of patients are more likely in hospital-owned or affiliated practices than in independent practices, Q1 2015–Q1 2016
49 Figure 17: Oncology practice affiliations, 2015–16
50 Figure 18: Reasons that oncology practices affiliate, 2015–16
51 Figure 19: Oncologists’ satisfaction scores with IDNs, 2014–16
60 Figure 20: Most frequently used real-world data sources, by organization type
64 Figure 21: Physicians’ belief that pharma and medtech can play a role in integrated care
65 Figure 22: Major areas addressed in service provision by the pharmaceutical industry

LIST OF TABLES
17 Table 1: Integrated care: benefits to patients and society
22 Table 2: Integrated care: focusing on similarities and differences
37 Table 3: Mayo Clinic coverage statistics
39 Table 4: A 2016 overview of the numbers and services at Providence Health & Services