Hospitalization Data

HOSPITAL and Physician NEWS: New Ga. Alliance joins wave of providers seeking common benefits and independence

By Beth Kutscher

The goals of population health management may be encouraging rampant consolidation across the healthcare industry, but some systems are pushing back and seeing whether they can achieve the same results with looser arrangements.
Over the past two weeks, in markets 900 miles apart, two new non-equity alliances have been formed to pool resources, coordinate information and gain population health management expertise.

In Georgia on Tuesday, a group of 23 hospitals in the central and southern part of the state have formed a not-for-profit limited-liability corporation called Stratus Healthcare, which was conceived as a way for its members to collaborate while remaining independent. It grew out of the April 2012 partnership between Central Georgia Health System, Macon, and Tift Regional Health System, Tifton.

The partnership is one of the largest of its kind in the country, said William Richardson, president and CEO of Tift Regional. He added that the goals of the alliance include establishing and exchanging best practices, creating an information technology “nerve center,” reducing costs and collaborating on population health.News of the group’s formation comes less than a week after Abington (Pa.) Health and two Philadelphia-based systems, Aria Health and Einstein Healthcare Network, similarly formed a non-ownership limited-liability corporation also to focus on population health management.

The first phase of the initiative will focus on jointly managing the healthcare benefit plans for the systems’ 32,000 employees. Although the employees won’t be in a single risk pool, the partners may be able to select a single third-party administrator, carrier and IT provider—with the greater goal of developing population health management expertise, according to Larry Merlis, president and CEO of Abington Health.

The second phase involves developing a network of “clinically integrated but independent providers” as well as reaching out to other employers to work with the group, Merlis said. The final piece involves forming partnerships with payers.

“For this market, we’re at the forefront of this,” he said.

Both collaborations are part of a small but growing number of alliances that aim to embrace a looser partnership model instead of a formal takeover agreement. In October, for instance, four systems in Missouri and Illinois formed the BJC Collaborative as a way to take advantage of the benefits of size and scale without losing their autonomy.

Stratus’ members represent not only acute-care hospitals but also post-acute-care providers, and other groups may join the alliance in the future, Richardson said. The alliance currently includes 1,700 physicians and 16,000 employees (PDF).

The Georgia healthcare landscape is divided between the four or five integrated systems that dominate the Atlanta market and the largely unconnected hospitals in the rest of the state, said Dr. Ninfa Saunders, who joined the Central Georgia Health System as president and CEO in September. Rural hospitals across the country that have been unable to find partners have faced a number of challenges, and some, including two in Georgia earlier this year, have been forced to suspend operations.

“The one thing I thought was missing was the ability to coalesce this region,” she said. “As opposed to competing with each other, you can come together for a common goal.”

A governing body consisting of the CEOs from each of the medical centers will oversee the alliance.

The members of Stratus chose to focus on a non-equity partnership because it was a quicker route to working together—and because they were reluctant to cede control.

“They really want to be independent,” Saunders said. “No one wants to do mergers and acquisitions.”

Stratus will focus initially on developing networks for primary and specialty care as well as creating hospitalist and emergency medicine programs that will allow members to create clinical guidelines, establish transfer arrangements, share information through telemedicine and learn from best practices.

On population health, Saunders said, the members intend to adopt the performance goals of an accountable care organization without participating in a formal shared-savings program.

Merlis of Abington acknowledged that the third phase of the initiative may require regulatory approval for the partners to jointly form contracts with payers—something they are barred from doing without a legal change in ownership status. “The intent for this is to phase in the initiative over a period of time,” he said.

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