SOUTH

Modern Healthcare - - REGIONAL NEWS - — Beth Kutscher

NASHVILLE— Van­der­bilt Univer­sity Med­i­cal Cen­ter is fur­ther ex­pand­ing its reach across the state with a new af­fil­i­a­tion agree­ment with West Ten­nessee Health­care, Jack­son. The deal rep­re­sents 909-bed Van­der­bilt’s fifth af­fil­i­a­tion in the re­gion since Oc­to­ber 2011. The aca­demic med­i­cal cen­ter also has a can­cer-care af­fil­i­a­tion in place with Bap­tist Me­mo­rial Health Care, Mem­phis, that it forged three months ago. Terms were not dis­closed for the agree­ment, which al­lows the sys­tems to col­lab­o­rate on pro­grams and ser­vices as well as new mea­sures to im­prove qual­ity and re­duce the cost of care, ac­cord­ing to a news re­lease. The agree­ment will also en­able the sys­tems to de­velop joint Cen­ters of Ex­cel­lence as well as ed­u­ca­tional and re­search pro­grams and new clin­i­cal in­for­ma­tion tech­nol­ogy tools. West Ten­nessee Health­care, a pub­lic sys­tem with six hos­pi­tals—in­clud­ing 619bed Jack­son-Madi­son County Gen­eral Hospi­tal, one of the largest in the state— serves 18 ru­ral coun­ties in the west­ern part of Ten­nessee. — Beth Kutscher

AR­LING­TON, Texas— Texas Health Re­sources and in­surer Blue Cross and Blue Shield of Texas an­nounced talks to form an ac­count­able care or­ga­ni­za­tion. Ron­ald Long, chief fi­nan­cial of­fi­cer and ex­ec­u­tive vice pres­i­dent of re­source devel­op­ment and de­ploy­ment for the 13-hospi­tal sys­tem, said a fi­nal agree­ment is ex­pected in July and the newly formed ACO would launch Jan. 1, 2014. Long said de­tails such as cost­sav­ing tar­gets have yet to be fi­nal­ized, but the agree­ment will tie per­for­mance pay­ments to qual­ity and cost con­trols. Blue Cross and Blue Shield pa­tients who are treated by Texas Health Re­sources’ em­ployed pri­mary-care physi­cians will be cov­ered by the ac­count­able care agree­ment, he said. Dr. Ed­uardo Sanchez, vice pres­i­dent and chief med­i­cal of­fi­cer for the in­surer, said qual­ity mea­sures for pre­ven­tive ser­vices, chronic disease man­age­ment and hos­pi­ta­lac­quired in­fec­tions were among the types of mea­sures un­der con­sid­er­a­tion. Sanchez said the agree­ment would be the Texas Blues’ first ACO con­tract, though the in­surer is in talks with other health sys­tems. Texas Health Re­sources was among the first to form a Medi­care ACO un­der the Cen­ter for Medi­care and Med­i­caid In­no­va­tion’s Pioneer ACO pro­gram. Long said Texas Health Re­sources and Blue Cross and Blue Shield of Texas drew on the Pioneer pro­gram as a model for their ef­fort. As many as 200,000 pa­tients could be in­cluded in the Blue Cross and Blue Shield of Texas ACO, which is a frac­tion of Texas Health Re­sources’ pa­tients, Long said, “but the idea is to get started.” — Me­lanie Evans

NEW OR­LEANS— LSU Health Sciences Cen­ter is col­lab­o­rat­ing with Peo­ples Health, a Medi­care Ad­van­tage ad­min­is­tra­tor, on a new care-co­or­di­na­tion ini­tia­tive that will also have a shared-sav­ings com­po­nent. Called the Cen­ter for Health­care Ad­vance­ment, the pro­gram ex­pands the health plan’s “vir­tual med­i­cal home” model, al­low­ing LSU physi­cians to work with the nurse prac­ti­tion­ers, so­cial work­ers and other per­son­nel at Peo­ples Health to man­age care for ben­e­fi­cia­ries.

The pro­gram will fo­cus on chronic disease man­age­ment and pro­mote life­style changes such as phys­i­cal ac­tiv­ity and smok­ing ces­sa­tion. It also aims to in­crease pa­tient com­pli­ance with treat­ments through ser­vices in­clud­ing phone call re­minders and trans­porta­tion to doc­tors’ ap­point­ments. “There’s a big em­pha­sis on self-care, and putting the pa­tient and the fam­ily in the driver’s seat,” said Dr. Steven Nel­son, dean of LSU’s med­i­cal school, on a me­dia call. “Health­care is a team sport,” he said. Carol Solomon, CEO of Peo­ples Health, noted that shared sav­ings will be part of the pro­gram’s con­trac­tual model, and there will be a par­tic­u­lar em­pha­sis on col­lect­ing out­comes data. Peo­ples Health will also as­sume the cost for set­ting up se­nior well­ness as well as pri­mary-care cen­ters in each mar­ket. “All of th­ese will be avail­able to the pri­mary-care physi­cian in that mar­ket,” she said. “We will be sup­ple­ment­ing the ser­vices they’re pro­vid­ing.” Peo­ples Health cov­ers about 55,000 ben­e­fi­cia­ries in south­east Louisiana.

PORT­LAND, Maine— East­ern Maine Health­care Sys­tems signed a de­fin­i­tive agree­ment to ac­quire Mercy Hospi­tal, a 168-bed hospi­tal in Port­land, that is part of Catholic Health East. As part of the deal, EMHS will ac­quire Mercy and its ser­vice units, in­clud­ing VNA Home Health & Hospice in South Port­land. EMHS, based in Brewer, owns seven hos­pi­tals and is the sec­ond largest health sys­tem in Maine based on bed count. The or­ga­ni­za­tions an­nounced plans to pur­sue a deal in De­cem­ber. Four months ear­lier, Mercy had en­tered into talks with Stew­ard Health Care Sys­tem, the Bos­ton-based for-profit health sys­tem, but the ne­go­ti­a­tions later fell through. “EMHS sup­ports our mis­sion and our iden­tity as a Catholic health­care sys­tem,” Eileen Skin­ner, Mercy’s pres­i­dent and CEO, said in a news re­lease. “We look for­ward to con­tin­u­ing to work with our EMHS col­leagues through the ap­proval process and the even­tual in­te­gra­tion of Mercy into EMHS.” Fi­nan­cial terms of the agree­ment were not dis­closed. How­ever, an EMHS spokes­woman said the sys­tem is “com­mit­ted to in­vest­ing in nec­es­sary cap­i­tal im­prove­ments at Mercy.” Catholic Health East is set to merge with Trin­ity Health in a deal that will com­bine two of the largest Catholic health sys­tems in the U.S. Mercy Hospi­tal has been con­sid­ered a chal­lenge for Catholic Health East and had re­ported large op­er­at­ing losses in fis­cal 2011 and 2010, ac­cord­ing to a Moody’s In­vestors Ser­vice rat­ings report from June 2012. The deal is ex­pected to close in the sec­ond half of this year. —

Jaimy Lee WEST CH­ESTER, Pa.—

Ch­ester County Hospi­tal and Health Sys­tem said it signed a non­bind­ing let­ter of in­tent to “join” the Univer­sity of Penn­syl­va­nia Health Sys­tem, Philadel­phia. Spokes­women for Ch­ester County Hospi­tal and the Univer­sity of Penn­syl­va­nia Health Sys­tem de­clined in­ter­view re­quests. Su­san Phillips, se­nior vice pres­i­dent of the Univer­sity of Penn­syl­va­nia Health Sys­tem, de­clined to say if talks in­cluded an ac­qui­si­tion of the 220-bed West Ch­ester, Pa.-based hospi­tal by the univer­sity health sys­tem. “Given that due dili­gence is now in process, and the con­fi­den­tial na­ture of the let­ter of in­tent, we will have no fur­ther com­ment at this time,” she said in an e-mail. Ch­ester County Hospi­tal re­ported an op­er­at­ing loss of $2.1 mil­lion on rev­enue of $293.4 mil­lion in the year ended last June. That’s com­pared with a $10.9 mil­lion op­er­at­ing gain on rev­enue of $291 mil­lion the prior year. The Univer­sity of Penn­syl­va­nia Health Sys­tem fin­ished its fis­cal year last June with op­er­at­ing in­come of $217.2 mil­lion on rev­enue of $3.6 bil­lion. Ch­ester County Hospi­tal’s board of direc­tors said in a state­ment last Au­gust that “the rapidly chang­ing land­scape and the in­creas­ing de­mands placed upon the health­care in­dus­try are caus­ing many in­de­pen­dent hos­pi­tals and health sys­tems across the coun­try to con­sider new op­tions and models of care.” The board ap­proved a com­mit­tee to “eval­u­ate strate­gic cor­po­rate part­ner­ships,” ac­cord­ing to the state­ment. The prospec­tive part­ners ex­pect a deal, which must un­dergo reg­u­la­tory re­view, to close this spring, ac­cord­ing to the Ch­ester County Hospi­tal and Health Sys­tem web­site. —

Me­lanie Evans

PITTS­BURGH— High­mark plans to buy out bond­hold­ers of the fi­nan­cially dis­tressed West Penn Al­legheny Health Sys­tem for 87.5 cents on the dol­lar to sal­vage an ac­qui­si­tion deal. High­mark reached the agree­ment in talks with five ma­jor bond­hold­ers for $726 mil­lion of the health sys­tem’s out­stand­ing debt. The in­surer and health sys­tem, both based in Pitts­burgh, are also fin­ish­ing ne­go­ti­a­tions to amend their ac­qui­si­tion agree­ment, which will be submitted to state in­surance reg­u­la­tors. High­mark’s spokesman de­clined to com­ment, but in a news re­lease of­fi­cials said the deal would avoid the courts, cut West Penn Al­legheny’s debt and strengthen the sys­tem’s bal­ance sheet. Of­fi­cials are in talks over fi­nal terms, which would re­quire ap­proval from bond­hold­ers with at least 73.5% of the out­stand­ing bonds. High­mark’s ac­qui­si­tion has been closely watched na­tion­ally as one of a grow­ing num­ber of deals among in­sur­ers, med­i­cal groups and hos­pi­tals. West Penn Al­legheny agreed to an ac­qui­si­tion by High­mark in 2011 as the sys­tem strug­gled with on­go­ing op­er­at­ing losses and sig­nif­i­cant debt—the sys­tem bor­rowed $752 mil­lion in June 2007, at the tail of the credit bub­ble that fu­eled easy ac­cess to cheap debt and ended with the Great Re­ces­sion. West Penn Al­legheny un­suc­cess­fully tried to break off the ac­qui­si­tion last fall, say­ing High­mark tried to com­pel the sys­tem to re­or­ga­nize un­der bank­ruptcy as a new con­di­tion of the deal. Mean­while, West Penn Al­legheny’s fi­nances con­tin­ued to de­te­ri­o­rate. The sys­tem lost $112.5 mil­lion on $1.6 bil­lion in rev­enue for the year that ended last June. —

Me­lanie Evans

A spokes­woman for 168-bed Mercy Hospi­tal in Port­land, Maine, said, “EMHS sup­ports our mis­sion and our iden­tity as a Catholic health­care sys­tem.”

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