Evanston (Ill.) Northwestern Healthcare has devised a structure for blind managed-care contracting among member hospitals, intended to restore price competition while salvaging much of the benefit of a 2000 merger condemned last month by the Federal Trade Commission.
As ordered by the FTC, ENH would create distinct and separate negotiating teams, one for inpatient services at 380-bed Evanston Hospital and 125-bed Glenbrook Hospital in Glenview, Ill., and the other for 172-bed Highland Park (Ill.) Hospital, which was brought into the system by the contested merger. The plan is outlined in a document ENH filed with the FTC late Monday. The FTCs staff has 30 days to consider the proposal and reply.
ENH would maintain a sort of clearinghouse of managed-care information at an office geographically separate from all of the hospitals, an arrangement it says would support the segregated contracting scheme but allow ENH to continue to operate as an integrated health system. Payers could choose whether to contract separately or with the entire ENH system.
In a widely watched post-merger challenge, the FTC concluded the deal allowed ENH to negotiate price hikes in its managed-care contracts above competitive levels. The commissions unusual remedy reversed the earlier conclusion of an administrative law judge that ENH would have to divest Highland Park Hospital. The system has not said whether it will appeal the decision. -- by Gregg Blesch
What do you think? Post a comment on this article and share your opinion with other readers. Submit your letter to Modern Healthcare Online at [email protected]. Please be sure to include your hometown and state, along with your organization and title.