UPDATE: Primary care at heart of hospitals' deal

February 18, 2013
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Community Health CEO Bryan Mills will lead the entity formed through a new partnership with Wishard Health Services. (IBJ Photo/Perry Reichanadter)

Community Health Network’s new partnership with Wishard Health Services will create a primary-care behemoth that the systems argue will put them in the best position possible to handle the changes coming from federal health reform.

The two Indianapolis-based hospital systems announced Monday morning that they have formed a joint operating partnership, which will coordinate the operations of their hospitals and health care facilities.

The two systems combined will have 29 health centers providing primary care and 28 locations providing behavioral health care.

“We are by far the largest organization in those two areas,” said Community Health CEO Bryan Mills, who also will lead the joint-operating entity.

The combined entity will be governed by a seven-member board, with four members coming from Community and three from Wishard.

Wishard,  the county-owned health system, will change its name to Eskenazi Health in 2014. Wishard is building a downtown hospital that will be the premier trauma center in Indiana as well as handle a large portion of Marion County’s indigent patients. The hospital is set to open in December.

The deal got started in late August when the leaders of Wishard—Lisa Harris and Matt Gutwein—visited Mills at his office on the northeast side of Indianapolis.

Gutwein, who is CEO of the Wishard-parent Health and Hospital Corporation of Marion County, said he and Harris realized their organization needed more “scope and scale” to handle the expected influx of patients coming from President Obama’s 2010 health reform bill.

That law raises various taxes to expand state Medicaid programs and provide subsidies for low- to middle-income Americans to buy private insurance. Combined, those efforts are expected to bring 27 million additional Americans into the health care system.

In Indiana, it is not certain that state leaders will expand the Medicaid system, which could dampen the number of newly covered patients. But patients with insurance coverage tend to use, on average, twice as much medical care as those who are uninsured.

“Our expectation from expanded coverage is more demand for services,” Gutwein said. “We expect that, which is one of the reasons why we’re doing this.”

Gutwein and Mills also said they were amazed at how little overlap the two hospital systems have in terms of geography and service lines. Mills said he had been considering if Community should get into the trauma business, but now it doesn’t need to, since Wishard has such a strong trauma program.

Their combined primary-care assets could help the organizations in two ways. First, health care reform is creating new ways of paying hospitals that will reward them for keeping patients healthy and out of the hospital.

Also, primary care physicians are often the first point of contact for patients who need specialized care. Their referrals are coveted by hospitals with large numbers of operating rooms and beds to keep filled.

The two systems will jointly operate Wishard's hospital and health centers, as well as Community’s hospitals, Community's physician network, its behavioral health services and many ambulatory sites of care.

Community is a not-for-profit system of seven hospitals, five of them in Marion County, and roughly 200 other surgery centers, imaging centers, physician offices and walk-in clinics. Community has more than 11,000 employees and annual revenue of $1.3 billion.

Wishard has more than 4,000 employees and more than $500 million in revenue.
 

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