Hospitals in Iowa and Nebraska have signed a letter of intent to develop a partnership they say will provide more cost-effective healthcare service delivery to their rural regions.
The announcement by the 13 hospitals and the purchasing group VHA Iowa to form an "accountable health partnership" came a week after Blue Cross and Blue Shield of Iowa joined with Iowa healthcare providers to offer an insurance product (June 20, p. 24).
The hospital alliance will be working on ways to reduce costs and enhance delivery through better coordination of healthcare resources. An information system is in the works for the alliance, said Stephen Messenger, a management and research consultant with Washington-based McManis Associates, who is working with the hospitals.
At least one insurance product will be offered and focus on multisite employers. For example, a chain of rural grocery stores could tap the alliance for insurance coverage. "We can rationalize their price and lower premium costs," Mr. Messenger said.
But Mr. Messenger said the alliance was not formed to compete with the Iowa Blues, especially since some of the hospitals involved are in both alliances. "We're not forming the relationship for the sole purpose of forming an insurance product."
Each of the participating organizations will retain its own identity and board. Each of them will contribute capital toward the alliance and its formation, but Mr. Messenger said the amount of money needed hasn't been decided.
"Healthcare providers across the country are under pressure from employers, consumers and the government to improve quality and access and reduce costs," said David Ramsey, president of the Iowa Health System, which is involved in both alliances. "We feel that by forming an integrated provider network we can go a long way toward facilitating more efficient and cost-effective healthcare services."
The hospitals involved are Burlington (Iowa) Medical Center; Genesis Medical Center, formed earlier this year through the merger of Mercy Hospital and St. Luke's Medical Center, both in Davenport, Iowa; Henry County Health Center in Mount Pleasant, Iowa; the Iowa Health System, formed last year through the merger of Iowa Methodist Medical Center and Iowa Lutheran Hospital, both in Des Moines; Mercy Hospital in Iowa City; Ottumwa (Iowa) Regional Health Center; St. Luke's Methodist Hospital in Cedar Rapids; Trinity Regional Hospital in Fort Dodge, Iowa; and Health Care Partners of Mid America, which includes Council Bluffs, Iowa-based Jennie Edmundson Memorial Hospital, University of Nebraska Medical Center in Omaha and Nebraska Methodist Health System in Omaha.