One of the largest medical centers in central Massachusetts has created a new health plan with a local health maintenance organization, which, they contend, will enable them to "meet or beat" their competitors' prices.
The Medical Center of Central Massachusetts, a 448-bed facility in Worcester, said its agreement with Pilgrim Health Care, Norwalk, Mass., lays the groundwork for the development of an integrated delivery system.
The agreement is marked by "an extensive commitment by both parties," which includes a joint sharing of financial risk, said Matthew Michela, Pilgrim's vice president of marketing. No specific financial details were available.
The hospital, which includes Hahnemann and Memorial acute-care facilities, is a major teaching affiliate of the University of Massachusetts Medical School.
Pilgrim has about 300,000 enrollees in the eastern parts of the state and Rhode Island, but fewer than 15,000 enrollees in central Massachusetts. The HMO plans to begin an aggressive marketing campaign to attract area employers, Mr. Michela said.
Pilgrim and MCCM will compete for new patients with Fallon Community Health Plan, a 168,000-enrollee HMO that operates its own hospital in Worcester, and Central Massachusetts Health Care, which has 82,000 enrollees in Worcester.
Nearly 30% of Massachussets residents are covered by managed-care plans, according to Excelsior, Minn.-based Interstudy, a research firm.
John Powell, CMHC's president and chief executive officer, said his company has been lowering premiums for many customers, but he doesn't want to be known as "the low-price plan" in the region.
He also said CMHC doesn't want the hospital to "force us to subsidize (Pilgrim's) patients." His company pays MCCM about $20 million annually for patient care, which he estimated represented about 20% of MCCM's patient load.
He said shifting patients from MCCM would be "disruptive," but other high-quality medical institutions in the area would appreciate the HMO's business.