Dartmouth-Hitchcock Medical Center announced last week that it's joining forces with its arch rival in Burlington, Vt., to form a new statewide insurance company.
The Lebanon, N.H., hospital said it would commit $1 million toward the creation of Vermont Health Plan, which was jointly formed by Blue Cross and Blue Shield of Vermont and Rutland (Vt.) Regional Medical Center, a hospital owned by Burlington-based Fletcher Allen Health Care.
Dartmouth was notably absent when those three institutions announced in July they were forming an HMO they said would hold down costs and maintain local control over the state's medical industry.
Dartmouth's top two executives said last week their hospital couldn't be left out of such an important development in Vermont's healthcare landscape.
"As the state of Vermont's second-largest healthcare provider, we believe it is our obligation to work with you and the other partners in (Vermont Health Plan) in a collaborative way to structure the best rural health care delivery system," the executives said in a letter to David Jensen, Vermont Health Plan's interim president.
James W. Varnum, president of Hitchcock Alliance, and John C. Collins, executive vice president of Lahey Hitchcock Clinic, announced the decision in the letter.
Hitchcock Alliance and Lahey Hitchcock Clinic are divisions of the larger Dartmouth-Hitchcock Medical Center.
Dartmouth's government relations director, Frank McDougall, said the New Hampshire institution was joining Vermont Health Plan at the same level as Rutland Regional Medical Center, $1 million. Fletcher Allen has committed $4 million to the venture, and the Blues' initial investment is in personnel and insurance expertise.
Dartmouth and Fletcher Allen have been feuding in the past year or so as both struggle to maintain their share of Vermont's healthcare market. They argued, for example, about whether it was prudent for Dartmouth to pay for a helicopter ambulance service.
But the Dartmouth executives said in their letter that they had to put their differences behind them.