While some emergency services groups are buying primary-care practices to compete with hospitals, Spectrum Healthcare Services is taking an alternative approach by partnering with its hospital clients to contract with managed-care payers.
In the past year, St. Louis-based Spectrum, one of the nation's largest emergency department contract groups, has signed four contracts with hospitals under its new Managed Emergency Care Program, said C. Christopher Eaton, Spectrum's vice president of business development.
The four hospitals are 385-bed St. Joseph Hospital and Health Centers, Memphis, Tenn.; 225-bed St. Anthony's Hospital, Amarillo, Texas; 356-bed Our Lady of Lourdes Medical Center, Camden, N.J.; and 499-bed Jersey Shore Medical Center, Neptune, N.J.
An estimate of the value of the contracts was not available.
The purpose of the program is to sign managed-care contracts with insurers, HMOs or state Medicaid agencies, Eaton said. "We are pursuing capitated contracts through this arrangement," he said. "We are going after the Medicaid population that nobody wants."
The contracts put both Spectrum and the hospital at risk for the patients in the managed-care plan, Eaton said.
"We can reduce costs and denials (for patient visits to the emergency department) and increase volume" through the partnership arrangements, Eaton said.
Some 40% to 60% of all hospital emergency department visits are nonemergency patients seeking primary care, Eaton said. About 50% of those nonemergency visits are from Medicaid, uninsured and underinsured patients, he said.
Under the Managed Emergency Care Program, hospitals pay for costs to restructure their emergency departments into a "three-tiered" department, Eaton said. Those three components are emergency care, primary care and 23-hour observation areas, he said.
Besides emergency physicians and support services, Spectrum provides a management information system to measure costs and outcomes, Eaton said.
Some contract managers such as InPhyNet Medical Management, Fort Lauderdale, Fla., and Coastal Healthcare Group, Durham, N.C., have purchased primary-care practices to set up networks to contract with payers and hospitals for the managed-care population.
"Our situation is different," Eaton said. "We are partners with our hospitals and not in competition with them for primary-care patients."