While some hospitals like Dartmouth-Hitchcock Medical Center in New Hampshire are trying to get out of the managed-care business, others just can't wait to get in.
Dartmouth again is trying to unload its HMO (See story, p. 6).
Those wanting in include Maine Medical Center in Portland; Johnson City (Tenn.) Medical Center; and ScrippsHealth, a San Diego-based hospital system. All three unveiled plans last month to get into the managed-care business as owners.
In Maine, the state's largest hospital system, which is led by 565-bed Maine Medical, announced plans to create a for-profit HMO through a joint venture with the state's largest insurer, Blue Cross and Blue Shield of Maine.
Approval of the plan, to be named Maine Partners Health Plan, is pending with the state insurance department. The department intends to hold public hearings on the proposal later this month.
Some competing providers already have expressed concerns that such a joint venture would be anti-competitive. The pair plan to target businesses in the Portland area with 50 or more employees.
Portland rival Mercy Hospital could lose a significant piece of business and faces the possibility of closing, said Howard Buckley, Mercy's chief executive officer.
"This will be a particular managed-care product, a fairly disciplined HMO attractive to a certain segment of the community, not all," responded Donald McDowell, Maine Medical's president and CEO.
In California, ScrippsHealth wants to jointly create a managed-care plan that would carry the Scripps name. Scripps would provide the physician network for the product while the partnering HMO would provide administration. The two would split the profit.
"The goal is to return 90 to 91 cents of each healthcare dollar to patient care, not to managed-care plan administration," according to a recently released white paper outlining Scripps-Health's long-term goals.
Stanley Pappelbaum, M.D., a former San Diego-area consultant hired by ScrippsHealth last October to oversee the changes, said, "We believe we would have a legitimate role in the insurance function."
A Scripps-branded health plan received applause from industry observers in Southern California, but the expectation is that it would be a delicate engineering feat.
"Scripps, of course, has a terrific brand name, while some HMOs are unknown, and it could give them a jump-start from a marketing standpoint," said Charles Ewell, executive director of the Governance Institute, La Jolla, Calif. "However, any potential partner is going to look for a quid pro quo, particularly a guarantee of financial stability and quality predictability, so their customers wouldn't have to go from one hospital to another."
Finally, Johnson City (Tenn.) Medical Center Hospital purchased a minority stake in a PPO operated by Knoxville, Tenn.-based Convenant Health. The PPO is called Preferred Health Partnership.
Terms of the deal weren't disclosed.
The hospital said the deal will better position it and Preferred Health to attract managed-care contracts.
"It's part of a statewide managed-care organization using not-for-profit community-based provider systems," said Larry Warkoczeski, vice president of Johnson City Medical Center Hospital. "We will get more local input."
Covenant Health also operates Fort Sanders Regional Medical Center in Knoxville, but that facility isn't part of the transaction.
Bruce Japsen and Ron Shinkman contributed to this story.