Qualchoice HMO the target of acquisition
Triangle Business Journal - by Steve Robblee
CHAPEL HILL -- UNC Hospitals is among three North Carolina teaching hospitals that are in discussions to buy a joint interest in Qualchoice, the Winston-Salem-based HMO partly owned by Wake Forest University.
The partnership would make Qualchoice a one-of-a-kind HMO in the state, with doctors at four of the state's premier teaching hospitals -- Carolinas HealthCare System in Charlotte, UNC Hospitals, Baptist Hospital in Winston-Salem and Pitt Memorial, the teaching hospital for the East Carolina School of Medicine.
It also gives Qualchoice inroads into markets in the Triangle and Charlotte. All of the HMO's 40,000 members live in western North Carolina.
Talks are proceeding smoothly between Qualchoice and hospital officials, said Terry Brewster, Qualchoice's vice president of sales and marketing. Qualchoice HMO of N.C. is owned by Wake Forest University and Baptist Hospital.
The sides are trying to put a value on a potential statewide Qualchoice and determine what portion of the HMO each hospital will buy. The four hospitals will not necessarily own equal interests of the joined HMO, Brewster said.
"The overall strategy is probably pretty much in agreement, but then you try to get into the details," Brewster said.
Qualchoice received its license in 1994, but it did not begin marketing its service until September of 1995, Brewster said. In 1996, Qualchoice lost $4.3 million on $15.2 million in revenues, according to records filed with the N.C. Department of Insurance. Those losses were expected because of start up costs, Brewster said.
Having four major hospitals as owners would allow the HMO to compete to provide health care to employer groups across the state, Brewster said. The other hospitals would retain their partnerships with local physician groups and hospitals, thereby increasing choices for Qualchoice members. Qualchoice now has affiliations with 1,200 physicians and 25 hospitals in the western part of the state.
If the merger is completed, the three hospitals get immediate entrance into an HMO that has already gone through the cost and effort of starting up.
"We're further along in marketing and systems development," Brewster said. "We're a tangible, viable company."
The hospitals believe they also will reduce overhead such as marketing and claims-paying functions by combining into one HMO.
John Stokes, a spokesman for UNC Hospitals, said the hospital had ruled out starting its own HMO because of costs associated with a new plan. But the hospital had been looking to get involved with managed-care plans.
That seems to be a growing trend among hospitals -- to both provide health care and insure potential patients.
"It's just another piece of the integrated health care network," Stokes said.
Brewster said running an HMO would be attractive to a hospital because it would be able to manage care more on its own terms. The alternative for hospitals, he said, is to have their policies dictated by large, publicly traded HMOs.
"You start to answer the question of controlling a little more of your own destiny," Brewster said. "You're not insulated from the changes around you."
Latest News |
