When casino riverboats rolled into Vicksburg, Miss., last year, they ushered in a new world filled with croupiers, poker chips and slot machines.
Many thought they'd never see gambling come to the old Southern town of 35,000 residents.
Nevertheless, gambling soon became one of the city's biggest industries, employing 8,000 workers. What followed was another new era, although this one wasn't totally unexpected-managed care.
The riverboats' four owners-all big-city corporations-were accustomed to dealing with managed-care organizations, and that's how they wanted to buy healthcare for their Vicksburg employees.
"The whole state of Mississippi has been insulated from managed care for a long time," said Briggs Hopson, M.D., a surgeon in Vicksburg for three decades.
Dr. Hopson, who chaired the governor's healthcare commission last year, said he knew it was time for a change.
The Vicksburg solution. As a result, he and 28 other physicians combined with ParkView Regional Medical Center in Vicksburg last month to form ParkView Medical Corp., a corporation that combines the assets of the hospital and physician practices. Physicians own 27% equity in the company.
ParkView is owned by Quorum Health Group, a Nashville, Tenn.-based investor-owned company that bought the hospital in 1990. Quorum purchased the facility with about 25 physicians, who held a 25% stake. Last month, that deal was expanded as physicians traded the equity in their own practices for equity in the new ParkView Medical Corp. The corporation has bought another four-physician group practice and plans to develop an urgent-care center as part of its new integrated network.
ParkView also plans to develop managed-care products such as negotiated fee-for-service contracts.
No extremes. It sounds like a perfect structure for capitation, but hospital officials and physicians say such a payment structure isn't in the immediate picture.
That may sound odd, but in a town where managed care is as foreign as iced tea without sugar, capitation would be an extreme concoction.
Actually, Vicksburg isn't alone. Last month, a report by the U.S. Bureau of Labor Statistics said that in 1993, 50% of full-time employees in large or medium-sized private companies were still enrolled in fee-for-service health plans.
What started the managed-care ball rolling for ParkView was Harrah's, a subsidiary of Memphis, Tenn.-based Promus Cos. Harrah's was the first to open a riverboat casino on the Mississippi River at Vicksburg. Promus, which has 25,000 employees in casinos and hotels throughout the country, contracts with Metropolitan Life for a point-of-service plan. Although MetLife didn't have a provider network in Vicksburg, it did have one in Jackson, which is about 50 miles away.
Promus agreed to work with Vicksburg providers if they were part of MetLife's managed-care network.
ParkView officials realized they didn't have a managed-care product to offer.
"It was sort of a wake-up bell that said this is the beginning of a new era," said Jim Dalton, president and chief executive officer of Quorum Health Group. "It got the physicians interested in looking at different things."
Managed care in Vicksburg has been a "learning process" for providers, said Kelly Jenkins, Promus' director of employee benefits. Even so, Promus wants providers to fit into that fomula. With the MetLife networks, its healthcare costs haven't increased in three years, Ms. Jenkins said.
Harrah's talked to both hospitals in Vicksburg, but ParkView failed to win the contract for Harrah's Vicksburg employees, Ms. Jenkins said. MetLife started working with the other hospital in town, Vicksburg Medical Center.
Yet, under the new structure, ParkView believes it will be ready for future contracts.
In addition, the new ParkView Medical Corp. structure is expected to help ParkView with physician recruitment efforts as well, Mr. Dalton said. New physicians are able to select one of three models. They can practice independently with no financial or corporate ties to the hospital; they can receive services through ParkView's management services organization; or, they can invest in the new corporation.
In the future, the corporation may offer stock or stock options to other physicians, said Roland Richardson, a Quorum vice president.
Ownership with a twist.Physician ownership in hospitals is not a new idea. In fact, Louisville, Ky.-based Columbia/HCA Healthcare Corp. has become synonymous with physician ownership in several markets.
However, the Vicksburg model is different in that it includes the physicians' practices. Columbia/HCA deals typically allow physicians to purchase equity in the provider system, but the physician practices remain independent.
This is Quorum's first physician-hospital corporate model that pools all of those assets, but Mr. Dalton said it likely will be offered in other locations. "We think it's a tremendous way to strengthen local relationships and take risks together," he said.
Now, ParkView is talking to a couple of the casinos about a managed-care contract, Dr. Hopson said. They're talking about a negotiated fee-for-service contract, and physicians realize they may have to treat more patients at lower prices, he said.
Through a closer alliance with the hospital, physicians feel more secure, Dr. Hopson said. "The driving force in the years to come is going to be industry," he said.