An east Texas hospital has opened up ownership of its preferred provider organization to other area hospitals as it attempts to snag more provider contracts in an area that is quickly moving to managed care.
Tyler-based East Texas Medical Center formed a PPO about 18 months ago, but it now will shift those contracts to a new not-for-profit corporation, Healthcare Partners of East Texas. Equal partners with the Tyler hospital in the corporation will be Good Shepherd Medical Center, Longview; Memorial Medical Center of East Texas, Lufkin; and Nacogdoches (Texas) Memorial Hospital.
"The managed-care market has developed here faster than many people have ever seen," said Elmer G. Ellis, president and CEO of East Texas Medical Center and its regional healthcare system. A few years ago, Tyler had no managed care. But since then, several managed-care insurance companies have entered the market, and employers are demanding discounts.
East Texas started a PPO, East Texas Health Benefit Network, about 18 months ago. The number of hospitals that contract with the network has since doubled to 14, and the PPO now has 120,000 participants in east Texas.
By broadening the ownership of the corporation to other large hospitals in the area, "I believe we're a more attractive network," Mr. Ellis said.
The four partners will contribute development costs to the network. Those figures are not yet available, Mr. Ellis said.
Although there has been some competition among the four hospitals, the new company's attorneys decided the collaborative venture doesn't pose antitrust problems, Mr. Ellis said. Twelve other hospitals in east Texas also have agreed to provide services to the PPO.
Organizers predicted the network will help eliminate duplication of services and institute case management services that will bring savings to payers. Jack C. Bailey, Memorial's president and CEO, said one of the venture's goals is to keep "east Texans in or near their home communities throughout treatment, thereby reducing the cost of care."