Columbia/HCA joins Nashville firm to form huge local network
Houston Business Journal - by Jennifer Darwin
Columbia/HCA Healthcare Corp. has found a way to align itself with an extensive number of physicians, and in doing so, it has created one of the largest local networks of health care providers.
Columbia's 18 hospitals have teamed up with more than 750 physicians, 200 to 300 of whom are primary care physicians, for the purpose of contracting with insurance companies for managed care contracts.
The QualityCare Network's physicians belong to 12 separate doctors groups. They are all managed by a large practice management company, North American Medical Management, based in Nashville, Tenn. Columbia has also struck a deal for the Tennessee company to manage the network and provide utilization management, claims processing and contract negotiations.
Dr. Pat Pingitore, North American's medical advisor, calls the association a physician/hospital network organization and says there is no other network quite like it.
"It's the first one we know of that's structured as such," he says.
The network will be using global capitation, a payment structure officials say will be more cost-effective.
Capitated arrangements are usually negotiated separately for the doctor and the hospital, with the hospital commonly receiving a per diem payment.
Global capitation involves negotiating one fee for both sides of the equation, which officials say will produce a cost savings. Whether that savings would be passed along to the consumers remains to be seen.
"We'll be able to manage those costs much more effectively," Pingitore says. "We both now have the same incentives because the health care dollar is under our control."
The arrangement will also mitigate what can sometimes be a financially adversarial relationship between doctors and hospitals when it comes to fixed- fee payments, Pingitore says. For example, a physician may want to run a test on a patient but wait until the person is hospitalized so the cost of the test comes out of the hospital's money.
One popular method of averting this conflict is for hospitals to buy the physician's practices. Pingitore says it does not achieve its goal, however, because the doctors still have no incentive to save money.
Anne Calhoun, vice president of business development for Columbia's Greater Houston Division, agrees.
"We think it's better because the physicians and the hospitals are working together," Calhoun says. "The patient goes where it's medically appropriate, not where the highest level of reimbursement is."
Pingitore also says North American Medical is helping to form a doctors group in the Texas Medical Center that would become part of the network.
"It'll include one of the major hospitals in the Medical Center," Pingitore says. "That will kind of complete the package."
That agreement, expected to be finalized by January, could be Columbia's entree into the Medical Center. Columbia has been trying to get its foot in the door for years, most recently with a failed attempt to partner with St. Luke's Episcopal Hospital.
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