Safety net provider aims to grow, compete

One California safety net health system will seek to double its size and to operate more like a health plan and “less like a collection of hospitals” to prepare for healthcare reform, its chief executive told healthcare officials gathered in Chicago.

Wright Lassiter, CEO of Alameda Health System, said the Oakland, Calif.-based health system would seek to build on a successful turnaround effort under way since 2005 by consolidating nearby independent providers and increasing its business with commercial payers.

Lassiter, who spoke at the American College of Healthcare Executives Congress on Healthcare Leadership, arrived at Alameda Health in 2005 as its eighth chief executive in seven years. Ongoing quality and financial improvement efforts reversed the system's chronic financial losses and the system will now seek to expand its geographic reach, he said.

Private insurers account for 10% of the health system's operations, he said.

Alameda Health has no existing insurance contracts that put its hospitals at financial risk for the total cost of patient' medical care, Lassiter said, but the not-for-profit system will seek to develop the analytical expertise needed for such contracts to better compete for commercial business against nearby giants Kaiser Permanente and Sutter Health.

Hospitals elsewhere in the country have entered into commercial insurance contracts that tie financial incentives to performance on quality goals and cost-containment targets, he said.

Private insurers increasingly include such financial incentives under accountable care contracts or through bundled payments, which offer hospitals and doctors a lump sum for a procedure and related medical care. Providers earn a profit when the medical care costs less than the lump sum paid by the insurer.

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