Woodland Hills, Calif.-based Health Net is eyeing its longest agreement with a provider group.
The HMO and East Bay Medical Network, a consortium of hospitals and medical groups, have tentatively agreed to a five-year capitated arrangement for managed-care services covering about 60,000 enrollees.
Financial details of the transaction weren't disclosed.
The newly formed consortium, led by Alta Bates Health System, Emeryville, Calif., includes three medical groups and seven hospitals in the California counties of Alameda and Contra Costa.
Although Health Net has some multiyear agreements with providers, most of its agreements are for one year, said Henry Loubet, senior vice president and head of Health Net operations in Northern California.
The hospitals in the consortium are Alta Bates Medical Center, Berkeley; Alameda (Calif.) Hospital; Valley Care Medical Center, Livermore; Doctors Hospital of Pinole (Calif.); San Leandro (Calif.) Hospital; Mount Diablo Medical Center, Concord; and Delta Memorial Hospital, Antioch.
The medical groups, which include 800 primary-care and specialty physicians, are Alta Bates in Berkeley, East County Medical Group in Antioch and Pacific Health Care Medical Group in Pleasanton.
Health Net will continue other medical group arrangements in both counties, including those with Hill Physicians in Oakland, Bay Valley Medical Group in Hayward and Palo Alto Medical Clinic in Fremont, Mr. Loubet said.
"We're excited about the opportunity to enter into this arrangement and expect it will allow us to provide quality managed-care services to our enrollees and our employer groups," Mr. Loubet said.
"We'll review other similar long-term arrangements on a case-by-case basis," he said. "We are very interested in developing other long-term arrangements. They provide predictability and consistency in terms of provider network, access and pricing, and we also think it enables us to position ourselves well vs. our competitors such as Kaiser," Mr. Loubet said.
Health Net has 1.2 million enrollees in California.