As Columbia/HCA Healthcare Corp.'s Health Advantage Network seeks to establish itself as Florida's premier PPO, several large not-for-profit hospitals have left the network to compete against it for managed-care contracts.
In the Tampa area, five not-for-profit hospitals operated by St. Joseph's-St. Anthony's Health System and Morton Plant Mease Health Care withdrew from Health Advantage to focus on the 12-hospital BayCare Health Network with which they are affiliated.
Health Advantage also recently terminated the contracts of four hospitals in Florida's panhandle region operated by Baptist Health Care, Pensacola, primarily to direct patients to Columbia hospitals, a Health Advantage official confirmed.
"They don't want competitors in their PPO," said Robert Van Slyke, senior vice president of Baptist.
Last month, 302-bed Bay Medical Center, Panama City, announced plans to withdraw from Health Advantage on Sept. 30.
"We were tired of being used. Health Advantage is geared to supply Columbia hospitals (with patients)," said Ronald Wolff, Bay Medical's president and chief executive officer.
Managed-care experts in Florida said Columbia acquired Health Advantage in 1992 as an instant contracting vehicle for its 58 hospitals in Florida. Founded in 1988, the statewide PPO has 155,000 members and 118 hospitals.
According to Mark Oshnock, partner in charge of the Southeast region of consulting firm Arthur Andersen in Atlanta, Health Advantage "will eventually terminate all the non-Columbia hospitals in Florida where they don't have a Columbia hospital. The only reason non-Columbia hospitals are in (Health Advantage) is for geographic coverage."
Columbia executives in Florida were unavailable for comment.
In June, Health Advantage positioned itself to become a major provider to 240,000 state employees and their dependents when Unisys Corp. won the state health plan contract from Blue Cross and Blue Shield of Florida.
Health Advantage is the largest of several PPOs under contract with Unisys. The state contract is effective Jan. 1, pending an appeal from the Blues plan (July 24, p. 38).
Earlier this year, Health Advantage became the preferred provider to Wal-Mart in Florida, said Jerry Lovejoy, Health Advantage vice president. The PPO is expanding into Alabama, California, Georgia, North Carolina, South Carolina and Texas to provide an exclusive network for Wal-Mart stores in those areas, Lovejoy said.
It was the Wal-Mart contract that led Bay Medical to drop out of Health Advan-tage, Wolff said. Wal-Mart operates a store in Panama City that employs 1,700 workers.
Health Advantage PPO members "were being told if they used (Bay Medical) they would have to pay a penalty premium," Wolff said.
Two months ago, Bay Medical treated two-thirds of the area's 4,500 Health Advantage members, Wolff said. "We went from that to zilch," he said.
Wolff said within hours of his announcement to drop Health Advantage, "I had Wal-Mart on the phone asking us for a direct contract."
Although Health Advantage has the preferred contract, a grandfather clause allows individual Wal-Mart stores to sign direct contracts with former Health Advantage providers, Wolff said.
Lovejoy said Columbia's Gulf Coast Hospital in Pensacola offered lower rates than Bay Medical. "There are always incentives and disincentives for using a provider," he said.
On terminating the Baptist contract, Lovejoy said: "We always get a better rate when we limit the number of facilities in an area."
He acknowledged that Health Advantage will terminate contracts of hospitals that directly compete with Columbia facilities if two conditions are met: One, the Columbia hospital offers a better price, and two, the Columbia hospital is located in the same market. "I get very excellent rates" from Columbia hospitals, he said.
But Lovejoy disputed the contention that Columbia's strategy is to use Health Advantage to ultimately create an exclusive Columbia hospital contracting network.
"I don't know Columbia's overall plan," he said. "You have to talk to the big boss (Dan Moen, Columbia's Florida president) about that."
Moen didn't return phone calls from MODERN HEALTHCARE.
However, Moen said of Columbia's strategy earlier this year: "Generally, we try to get as many of our hospitals into the payers' network as is possible." Moen's comments were contained in a March 23 deposition that was taken as part of a lawsuit involving Orlando Regional Healthcare System and Columbia over the disputed ownership of South Seminole Hospital in Longwood.