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