BayCare Health Network, a 14-hospital not-for-profit network based in Clearwater, Fla., has hired the Hunter Group of Tampa, Fla., to explore possibly merging or affiliating facilities or sharing services to become more competitive with Columbia/HCA Healthcare Corp.
"We asked (the Hunter Group) to work with us to identify potential costs to ring out of the system that are duplicative or areas where we can eliminate costs," said Frank Murphy, BayCare's chairman, and president and chief executive officer of three-hospital Morton Plant Mease Health Care, Clearwater.
Murphy said it's too early in the information gathering stage for BayCare to discuss specific options or models.
However, sources within BayCare said the options range from forming a holding company with the hospitals retaining individual assets and partial autonomy to a full merger among some or all of the facilities.
Murphy wouldn't rule out any possibility.
"We've got to stay ahead of the curve," he said. "We have some very successful hospitals (in BayCare). We have a good PPO network, but that's not as far as we need to go to be successful (as an organization)."
In Tampa-St. Petersburg, BayCare competes head to head with Columbia's 14-hospital Tampa Bay Health System.
Murphy said in June BayCare will appoint a steering committee of board members to shepherd the planning process. He said recommendations aren't expected until early fall.
"We will try to identify administrative and management areas to save money," Murphy said. Those areas include joint supply and equipment purchasing, and sharing of laboratory and support services. He said BayCare hospitals also may jointly develop home health and other outpatient services.
Murphy estimated cost savings of 5% to 10%.
"We have to find ways to share services so we can lower our costs to better compete for managed-care contracts," said William Anderson, president and CEO of 100-bed South Florida Baptist Hospital in Plant City, a freestanding member of BayCare.
"We may try to create one structure with multiple segments within it," Anderson said. Those segments could include shared services and management of outpatient services, he said.
BayCare currently contracts with employers and insurers to provide coverage for more than 60,000 patients. About 2.2 million people live in the Tampa area, with about 27% in managed-care plans.