(continued)that will merge themselves away," Rutledge said. There are now 17 hospitals in the Portland area.
The latest consolidation was announced in April when Kaiser said it would close its aging 135-bed Bess Kaiser Medical Center by January 1997 and treat patients at Providence and OHSU facilities. Kaiser will help develop a pediatric "center of excellence" at OHSU's new Doernbecher Children's
Hospital, set to open in 1997. Providence's St. Vincent Hospital and
Medical Center will treat the majority of Bess Kaiser patients.
But that still leaves two children's hospitals in Portland, which some payers view as a luxury.
Physicians get organized.
To gain stronger footholds, each of the major players has forged alliances and mapped out its own strategy, partly based on different relationships with physician groups. As a result of managed care, those groups-and their market power-are growing.
"I think the thing that's most interesting is what I call the reformatting of the physician practices in the greater Portland area,"
Speight said. "Portland has historically been a onesy-twosey doctor town, with some exceptions."
The large, organized groups represent "roughly 300 doctors, and there are 685 primary-care doctors in the greater Portland area, so less than half of them are organized into what could be the core of emerging medical groups," Speight said.
The larger groups-Metropolitan Clinic, Portland Clinic and Suburban
Clinic, which have 112 physicians total-formed a joint venture in January
1994 called Coordinated Healthcare Network. The network offers full-risk health plans serving 700 commercial and 1,300 Medicaid patients, said
Scott Conroy, its executive director.
Meanwhile, Mullikin Medical Centers, a 400-physician group based in Long
Beach, Calif., shook up the market in March when it expanded into Portland.
Mullikin merged with Pacific Medical Group, which includes 25 partner physicians and has contractual relations with 60 primary-care physicians and 500 specialists.
Mullikin's physician/administrator team model, which has been enormously successful in California, has been acting like a magnet to independent-minded Portland physicians: "We have been approached by numerous small groups, and we have entered into negotiations with several of them," said David Klubert, M.D., regional medical director of Mullikin
Medical Centers of Oregon.
Mullikin is a physician-owned and -operated company allowing partner physicians to have the control they want to make decisions, making it attractive to small physician groups that don't want to be swallowed up by insurance companies.
The other large groups are 72-physician Portland Adventist Medical Group and a 71-physician group owned by Providence. Kaiser has 495 physicians in the Portland metropolitan area.
Two physician-hospital organizations in the Portland suburbs include
Tuality Forest Grove (Ore.) Hospital and Willamette Falls Hospital in
"The hospital-health plan organizations have kind of come together. The physician piece is where the cards are up in the air," said Greg Van
Pelt, chief executive of managed care at Providence. "That needs a lot of settling out," and once that happens systems will have to respond, he said.
The major players are:
Legacy, created through a merger in 1989, operates two downtown hospitals-Emanuel Hospital and Health Center, with 342 staffed beds, and
283-bed Good Samaritan Hospital and Medical Center-and two suburban hospitals, 87-bed Mount Hood Medical Center in Gresham and 108-bed
Meridian Park Hospital in Tualatin. In 1993, it closed Holladay Park
"Legacy has developed a strategy to have a contractual relationship with
(the Blues) on the HMO side and with medical groups on the other side.
Their strategy is to have three equal contracting partners," Rutledge said.
Unlike Kaiser and Providence, Legacy does not hire physicians or buy practices. "When you go out and buy 75 or 100 very fragmented physician practices, you have a major management challenge on your hands," said John King, the system's chief executive officer. Legacy's contracts cover 1,300 physicians.
Legacy also has not established its own HMO to integrate hospital, physician and insurance components.
Instead, Legacy is involved in "ongoing planning in the creation of what we tend to call a virtual organization between (the Blues) and our primary-care group practices and ourselves," King said. "We strategize, focus and try to act as if we're one organization. We have our own PPO and are basically the exclusive provider for (the Blues') HMO" in the Portland area, he said.
Legacy decided not to launch an HMO because it would have been "the last one in a mature, consolidated market," King said.
In partnership with physicians, Legacy is developing ambulatory-care sites throughout the me