In the first combination of its kind, the Missouri Hospital Association and the Kansas Hospital Association are moving most of their member service functions into a joint venture called the Health Alliance of MidAmerica.
Each association will own half of the venture. The alliance will carry out such functions as federal lobbying, group purchasing, policy analysis, regulatory interpretation and consulting to nearly 300 hospitals in both states. Data and research functions, which the MHA has been providing to the KHA, will also be consolidated. The alliance is expected to be up and running in March.
"The purpose of the affiliation is not to achieve economies of scale," said Marc Smith, president of the MHA. "It's to improve service, enhance value and provide access to expanded staff expertise." Efficiencies will emerge, but "the cost-reduction imperative is not what was driving this relationship," he said.
Many state associations are beginning to share functions, said Richard Wade, senior vice president for communications at the American Hospital Association. "These are the first two that have formalized it."
Membership in many hospital associations is shrinking through mergers and consolidations. The groups are trying to think of new ways to eliminate duplication and hold the lid on dues so they can show members they're conserving resources, Wade said.
The idea for the new venture occurred to Smith and Don Wilson, president of the KHA, at an AHA meeting about a year ago. They appointed a study group to work out the details.
The plan was approved by the MHA board in December and by the KHA board in January.
Services for the new company will be provided by the two associations' staffs, under contract with the alliance.
There is no financial target for the alliance, but Smith said roughly one-third of the associations' operations will be funneled through the alliance, for a volume of about $4 million per year. The KHA's 1998 budget was $4.5 million; the MHA's was $8.9 million.
Services will be confined to Kansas and Missouri. The KHA has 144 members; the MHA, 153.