As hospitals and HMOs compete to form strong regional networks, they're starting to look to new partners outside their immediate industry-dental managed-care plans.
Last year, PacifiCare Health Systems, Cypress, Calif., bought California Dental Health Plan, a 450,000-member plan based in Tustin, Calif., and similar affiliations may occur.
Some 14 million Americans are enrolled in dental managed-care plans, according to the National Association of Prepaid Dental Plans. However, membership is growing at a fast 20% clip and consolidation is under way among the 150 managed dental health firms.
One merger now under way involves two privately held firms, Dallas-based United Dental Care and San Diego-based National Dental Health, combining into one of the nation's largest managed dental health plans. United has agreed to buy National, a move that will boost its membership to 700,000 enrollees and $65 million in annual revenues.
United has arrangements to provide managed dental health to five medical HMOs, but president James Kingston sees that business increasing. "Most medical HMOs find the need to have some kind of dental care," he noted.
Chicago guide. It appears Rick Scott and Columbia/HCA Healthcare Corp. executives are learning Chicago's political ropes. The healthcare giant's new vice president of network development for Chicago, Kathleen Kustra, 50, was scheduled to start this week and will help Columbia "anticipate legislative mandates and market realignments," a Columbia release said.
As far as state legislative mandates, she's got that covered since her husband, Robert Kustra, is Illinois lieutenant governor. Ms. Kustra comes to Columbia from her post as director of Health Care Services at Grant Thornton in Chicago and is a past director of the Illinois Department of Public Aid. Columbia owns six hospitals in the Chicago area but has vowed to acquire a half dozen more. Outliers will be watching to see what kind of rain Ms. Kustra can make in this election year with Republicans like her husband and his boss, Gov. Jim Edgar, up for re-election this November.
Is it or isn't it? In what looks like the makings of a mega-merger in Chicago, EHS Health Care of Oak Brook, Ill., and Lutheran General HealthSystem of Park Ridge, Ill., are getting down to the nitty-gritty.
With assets of more than $1 billion, the two suburban hospital giants have been in "meaningful" discussions in the past three to four months. They already have a joint managed-care endeavor, Health Direct, which taps a base of 250,000 patients between the two hospitals. Executives would only say their talks involve a merger or a "very strategic partnership." "We're in a very delicate and confidential state," said John Kessler, senior vice president at Lutheran.
CD-reform. Are your "healthcare reform" files beginning to bulge and become a little unwieldy? Need to know the nuts and bolts of the Cooper/Breaux proposal or the differences between the Health Security Act and the American Health Security Act? An interactive CD-ROM product being offered by two East Coast companies could be the answer.
"The National Health Care Debate" computer disk, produced by Yonkers, N.Y.-based I-MODE Publications and Greenwich, Conn.-based Reliance Medical Information, includes the entire texts of virtually all proposed federal healthcare reform legislation, as well as hundreds of health-related and public policy articles from peer-reviewed journals.
Software included with the disk speeds the search through the thousands of pages of documents and allows users to make notations in the material.
The disk/software package costs $79.95 each. The product also is available in a floppy-disk format.
Transition. Speaking of software, client hospitals operating on Ibax Healthcare Systems programs will be able to ask the top execs of both Ibax and its acquirer, HBO & Co., just what the merger means to them.
A series of meetings is scheduled this week in Boston, Chicago, Phoenix and HBO's home base of Atlanta, featuring Charles W. McCall, HBO president and chief executive officer, and Jeffrey S. Goodman, president and CEO of Longwood, Fla.-based Ibax.
Protection of current investments in Ibax products is bound to be foremost on the minds of customers as the June 1 target date for acquisition counts down (May 9, p. 10). But industry consultants don't see HBO rushing to convert Ibax clients and close down product lines and support.
Jerry Hendrickson, director of consulting services for the Kennedy Group, predicted HBO would gradually try to move mainframe clients of both its own HealthQuest and Ibax's Series 5000 programs to smaller computers. But he said Ibax offerings would still be supported, and "where appropriate, transitional programs will be scheduled and accomplished." HBO "has come a long way" in customer service, he said. The company is "business-oriented and understands business interruption."
Real-life lesson. Roice Luke, a healthcare professor at Virginia Commonwealth University, has become kind of an expert on hospital merger trends, having authored several studies in the past year on this on-going phenomenon.
This month, the trend hit close to home, and ironically, Mr. Luke had never figured the odds of his university's hospital actually getting caught in the whirlpool. For example, one of Mr. Luke's studies had pegged National Medical Enterprises, Santa Monica, Calif., as a compatible acquisition target for Columbia/HCA Healthcare Corp. (Nov. 1, 1993, p. 4).
This month, the Louisville, Ky.-based chain of 196 hospitals began talks with officials of Virginia Commonwealth about a joint venture, lease or other businesss arrangement with the university's Richmond hospital, Medical College of Virginia Hospitals (May 9, p. 12).
Although Mr. Luke said the development was "unexpected," he sees it as a "win-win for everybody." He noted that the hub-and-spoke strategy of Columbia/HCA-networking community hospitals with tertiary-care hospitals in certain markets-is a relatively new one for investor-owned chains.
Hey, maybe there's a study in there somewhere.