Regional News/South: Christus Health to run Chilean university's health network, and other news

IRVING, Texas—Christus Health, a Catholic not-for-profit health system, announced that it plans to enter into a joint venture with Pontificia Universidad Católica de Chile, a Chilean university owned by the Catholic Church. The memorandum of understanding signed by the two provides for the ownership, operation and expansion of Pontificia Universidad Católica de Chile's health network as 17-hospital Christus supplies a local executive team, including CEO, chief operating officer and chief financial officer. “We believe that the partnership we create in Chile and our experience in Mexico will allow us to meet deep healthcare needs and will also help us diversify our operations, strengthen Catholic healthcare around the world and help Christus lead the development of new, international healthcare models,” Ernie Sadau, president and CEO of Christus Health, said in a news release. Though a definitive agreement regarding details of the operations has not been reached, a final deal is expected within the next three to six months. It is anticipated that Christus will own a 40% stake in the venture. Its health system is one of the largest in Chile, including two hospitals, 11 outpatient centers and a laboratory and imaging services network, according to Christus. Besides its hospitals and a number of long-term-care facilities, Christus Health also has 175 clinics and outpatient centers. The Catholic health system is also in 60 cities and has had an international presence since 2001, operating a similar joint venture with a seven-hospital system in Mexico.

—Rachel Landen

RALEIGH, N.C.—Community Care of North Carolina, a not-for-profit agency that runs the state's much heralded Medicaid medical home program, is coming under scrutiny after a state auditor report found that the program was falling far short of achieving the savings it had predicted. The state has since published a request for information seeking recommendations to improve its Medicaid program. A study has also been called for to determine whether the medical home practice model—that emphasizes increased access and coordinated care—does in fact save money and improve health outcomes. State Auditor Beth Wood's report found a general shortfall of $190 million, and showed that Community Care fell $39 million short of the $90 million savings it had projected. The program has been in place since 1998, and the audit report noted that “North Carolina is the home of the medical home.” The program has been the subject of glowing reports from consulting and actuarial firms. In December 2011, a report from the Milliman actuarial firm calculated that the program had saved the state $984 million between fiscal 2007 and 2010. But the audit found flaws in the Milliman report, stating that it is “based on assumptions and adjustments to data.” “For instance, it adjusts the health status of relatively healthy adults and children in CCNC to be comparable to non-CCNC participants,” the audit report stated. “However, this requires an assumption that the CCNC participants are much unhealthier before comparing the projected costs of the theoretically unhealthy population to the non-CCNC population. While such an exercise may be actuarially sound, it does not provide the same quality of data that could be derived from medical research.” Among the audit report's recommendations is a suggestion for the state to engage medical researchers to perform a scientifically valid study based on actual data to determine whether the CCNC model saves money and improves health outcomes. In its written response to the report, the North Carolina Department of Health and Human Services said it agreed with the recommendation, noting that, “as we work to control costs and improve the quality within the Medicaid program, it is critically important that the data available is analyzed by a reputable research organization.” A representative from the DHHS did not return a request for comment.

—Andis Robeznieks