Before dipping a toe in the capitation pool, many hospital systems are scrambling to add primary-care physicians to their networks.
St. Louis-based Deaconess Health System spent the last two years grooming for capitation. Since December 1992, the two-hospital system has purchased about 10 physician practices, representing some 60 primary-care physicians, said Steven Stout, vice president of corporate development. He declined to disclose the size of the hospital's investment because it "might be something I don't want our competitors to know."
Rather than seek mergers with hospitals, Deaconess has focused on integrating with primary-care physicians, recognizing that providers with a strong primary-care network "will be in great demand," Mr. Stout said.
"The physicians who have integrated with us are those who share our vision for the future," he said, adding that because the risk-sharing concept is new, the physicians tend to be young.
Deaconess also has set aside $13 million to develop a new, PC-based information system linking its two acute-care sites with the estimated 25 physician and ambulatory-care sites that will be part of the Deaconess system by the end of the summer. It will take a couple of years to put that system in place.
Preparing for capitation also requires a change in mind-set. Rather than resist the managed-care movement, Deaconess is embracing it, Mr. Stout said. In St. Louis, fewer than 20% of area residents are enrolled in HMOs. Deaconess hopes to secure its position in the marketplace by being ready take on risk before its competitors.
"In the case of going from fee-for-service to capitation, it means totally stopping the train and turning it around," Mr. Stout said.