The shelving of merger talks among several New England hospital organizations hasn't affected plans to get into the managed-care contracting business together.
The principals of that would-be merger are still meeting with Blue Cross and Blue Shield of New Hampshire to develop an independent practice association and hospital network to which the insurer will direct its business, said Steve Marion, vice president for regional planning at Mary Hitchcock Memorial Hospital in Lebanon, N.H.
Hitchcock Memorial is the largest in the group of hospitals that proposed forming the United Community Health System, which would have covered most of New Hampshire, half of Vermont and the middle of Massachusetts.
One of the objectives in forming the system was to respond to managed-care market forces, Marion said. The hospitals won the Blues contract last fall just on the strength of their potential as a network, said Clark Dumont, vice president of public affairs and communications for the Blues plan (Dec. 5, 1994, p. 21).
Last month, the boards of the hospitals could not agree on a specific approach to governance under a common holding company, Marion said.
But that won't stop them from organizing to form the Blues network, Dumont said. "They want to still remain a `virtual organization' so they can still do things like contracting with managed-care organizations," he said.
The hospitals plan to incorporate as shared owners of a not-for-profit managed-care contracting company, Marion said. The Blues plan would be the first customer.
The hospital partners are the Hitchcock Alliance, which includes 407-bed Hitchcock Memorial and two other facilities, 175-bed Cooley Dickinson Hospital in Northampton, Mass., and 31-bed Upper Connecticut Valley Hospital in Colebrook, N.H.; 177-bed Cheshire Medical Center in Keene, N.H.; Capital Region Health Care Corp., which operates 210-bed Concord (N.H.) Hospital; and 112-bed Wentworth-Douglass Hospital, Dover, N.H.
Another original member, 171-bed Southern New Hampshire Regional Medical Center in Nashua, withdrew in January to begin affiliation talks with the Lahey Hitchcock Clinic, an 830-physician group practice that's adding healthcare facilities as part of its bid to cover much the same territory. The affiliation is expected to become final July 1.
Marion said the difficulties in getting diverse organizations to agree on a common governance structure don't mean the region's push for consolidation is losing any steam.
"Though this group of hospitals didn't integrate, there's still a lot of interest in integration models. I don't think this is going to go away," he said.
"It's already clear that the big insurance companies prefer to deal with large integrated networks," Marion added.
The partners in the proposed managed-care company also are considering other joint ventures, such as collective community health assessment initiatives and coordination of information services, Marion said.
The projects are aimed at furthering not just the contracting advantages of joint action but also the practice-improvement aspects of managing care regionally, he said.