SOUTH CHARLESTON, W.Va.-The state Medicaid tax on physician revenues is having the unintended side effect of hurting the efforts of many of West Virginia's 63 hospitals to recruit and retain physicians, according to a report by the West Virginia Hospital Association. More than half of the hospitals are located in counties that border surrounding states. "Hospitals in the northern panhandle, in particular, have had physicians move across the state line to avoid the provider tax," the association said. "This has substantially reduced market share and revenues for affected hospitals." Last June, the state placed a 2% tax on physicians' gross revenues to help fund the state's Medicaid program. The amount collected to date wasn't available from the state at deadline. The West Virginia State Medical Association is challenging the provider tax in court.
MEMPHIS, Tenn.-Three of the city's prominent specialty group practices have formed a new alliance to contract directly with insurers and employers. The new Mid-South Physicians Alliance is composed of the 27-physician Campbell Clinic, which specializes in orthopedics; the 30-physician Semmes-, which specializes in neurology and neurosurgery; and the 13-physician Cardiology Group of Memphis. John Vines, Campbell Clinic's chief executive officer, said the three groups intend to add a large primary-care contingent to the new alliance. Ultimately, the alliance will have about 400 physicians, with half in primary care, Mr. Vines said. The three specialty practices, which are affiliated with Baptist Memorial Hospital in Memphis, will serve as the "anchor" of the new alliance because of their financial resources and existing market share, he added. The alliance will subcontract with local hospitals for acute-care services for patients who receive care through the alliance. Mr. Vines said he hopes the alliance is operational and accepting contracts this fall.
BIRMINGHAM, Ala.-St. Vincent's Hospital said it expects to join Alabama Health Services, a joint venture formed last year by two other Birmingham hospitals, within four months. The transaction would not involve the merger of assets, said Vincent Caponi, St. Vincent's president and chief executive officer. St. Vincent's is sponsored by the Daughters of Charity National Health System, St. Louis. AHS is a venture between for-profit AMI Brookwood Medical Center and not-for-profit Medical Center East. The hospitals have agreed to use AHS to share primary services and jointly negotiate managed-care contracts. Birmingham has 10 medical-surgical hospitals.