Integrated Delivery Network (IDN)

What is an integrated delivery network (IDN)?

An integrated delivery network (IDN), sometimes referred to as a health system, is an organization that owns and operates a network of one or more healthcare facilities. Because IDNs are designed to provide a wide variety of care services, they often contain many different types of inpatient and outpatient care facilities including: 

What are the different types of IDNs?

IDNs in healthcare can be categorized into four different types, depending on the number of member healthcare facilities and the way in which it approaches strategic decisions like purchasing or care coordination. All IDNs can be classified into one of the following integration levels: 

  • System II (Horizontal Integration): These are usually regional or national multi-hospital systems. System II networks primarily own and manage hospitals but can sometimes include other care facilities. Many government, state, or investor-owned IDNs are classified as system II networks.
  • System III (Vertical Integration): These networks provide cradle-to-grave healthcare services. They contain a wide variety of care facilities within the same system, ranging from prenatal care to assisted living facilities and hospices. The objective of a vertically integrated health system is to share information and resources equally across facilities. Many academic, catholic, and community health systems are classified as system III networks.
  • System IV (Strategic Integration): These are vertically integrated systems that implement an exceptional degree of strategy and organization in their internal structures. In these IDNs, information systems, centralized administrative control, purchasing, and distribution are aligned across all facilities in the network.

What is an example of an integrated delivery health system?

An example of a system II IDN is NYC Health and Hospitals. This government-owned IDN includes 12 hospital locations as well as other system components such as federally qualified health centers, physician groups, and imaging centers, to name a few.

An example of a system III IDN is HCA Healthcare. This large IDN includes 214 hospital locations. Other system components include but are not limited to physician groups, urgent care clinics, imaging centers, home health agencies, and skilled nursing facilities.

An example of a system IV IDN is Kaiser Permanente. This IDN includes 43 hospital locations as well as various other system components like ambulatory surgery centers, hospices, imaging centers, retail clinics, and urgent care clinics.

What is the difference between an IDN and a health system?

While IDNs are considered health systems, not all health systems may be classified as IDNs.

An IDN is a form of health system, but traditional health systems differ in that they are typically independent organizations that work together through contractual agreements and share financial and medical responsibilities.

An IDN has a more cohesive structure, as it oversees all hospitals, facilities, providers, administrators, and technologies within the system.

Why are integrated delivery networks important in healthcare?

Much like accountable care organizations (ACOs), IDNs use their vast networks of healthcare providers to deliver high-quality, coordinated care to patients. Because of the wide range of care services IDNs can offer, they can address nearly all of their patients’ needs without seeking out-of-network referrals. This not only allows for greater communication and care collaboration across a patient’s whole continuum of care but also helps to prevent revenue loss from network leakage.

Some large integrated delivery networks are also able to leverage their market influence for greater negotiating power in the same way a group purchasing organization (GPO) would. This allows IDNs to secure competitive supply chain prices which in turn can help lower overall healthcare costs.