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Yale New Haven Health Partners with Tenet Healthcare in CT

John Commins, for HealthLeaders Media, March 7, 2014

Borgstrom says discussions had been ongoing with Vanguard Health System about a possible collaboration before Tenet's $4.3 billion acquisition of Vanguard last year. The talks continued with Tenet.

"Opportunities like this are organic and they grow out of relationships and fundamentally there were some hospitals that were looking for an opportunity to become part of a system that we felt we couldn't meet through the Yale New Haven Health System. So, they began to talk to Vanguard [and] now Tenet," Borgstrom said.

"We have had relationships with these organizations and when they began talking with the leadership in Vanguard who we have also known for a long time they also talked with us and said 'this is in your neck of the woods. Is there an opportunity for us to do something together?' We said 'let's explore it' and that is how it evolved."

Yale and Tenet said in a joint media release on Thursday that the collaboration would "create a comprehensive healthcare delivery network in Connecticut, with the intention to expand into the greater Northeast region."

"Using the strengths of each organization, the partnership will enhance the efficiency and coordination of healthcare in the region by offering comprehensive clinical services to a larger geography," the two systems said. "Additional plans include creating a clinically integrated delivery platform with local physician groups and entering into value-based contractual relationships with employers and other payers of healthcare services."

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2 comments on "Yale New Haven Health Partners with Tenet Healthcare in CT"


Robert Sigmond (3/8/2014 at 8:03 PM)
I suggest that Tenet take over the entire billing and collection function and staffs of these hospitals and pay each of them a single monthly check, based on the annual budgeted operating income from all sources. Thr annual budget would be developed collaboratively, and based on a collaborative long range reform plan. This would be a dream com true for the CEO's of the hospitals: [1] no more concerns about operating deficits, [2] no more involvement at all with the negative incentives of payment by fees for service, [3] no more direct involvement with unpleasant paying patients and third party payers, and [4] the opportunity to collaborate with an organization that has a lot more experience in internal and external collaboration to shift from volume to value and actually reduce operating expenses. For Tenet, it [INVALID]s a new service that it will be able to carry out more effectively than its individual hospitals and avoids paying the individual hospitals for contracting with collection agencies which often may not reflect the best interests of Tenet in the marketplace. Of course, a great many details have to be worked out and incorporated in the contract between Tenet and each hospital. Most important, there must be agreement about how to divide up any money that reflects either positive or negative differences between budgeted and actual net income at the end of the year. That works best if there is also continuous monthly collaboration in reviewing and making adaptations in the annual budget. For more information about this exciting idea, I'd love to hear from you ....by e-mail or telephone: 215-561-5730 Regards, Bob

bob sigmond (3/7/2014 at 9:08 PM)
For real benefit to the collaborating corporations as well as the general public, I suggest that Tenet take over Vanguards' complete rate setting, billing and collection functions and the staff responsible for that work, and pay each Vanguard-related organization a single monthly check, based on the budgeted income in a collaborative budget, based on a collaborative long range strategic plan. With this arrangement, the Vanguard-related organizations will no longer be involved in any way with fees-for-service and with concerns about operating deficits, and with involvement with other third part payers as well as with difficult self-paying patients. For the Vanguard organizations, truly a dream come true. For Tenet, a new function that will be key as marketplace provider competition becomes ever less important in the Obamacare years ahead. The real marketplace competition will center on premiums, not hospital charges. With Tenet managing the collection processes, Tenet will no longer have to pay anything for this function, and should also save a lot of money with a more effective process that focuses on getting more and more income from premiums with much more rational fees-for-services. Most important, all the adverse incentives associated with providers being paid by fee-for-service are gone forever. Eventually expanding this approach to all of its hospitals, Tenet can overshadow all other third party payers with respect to quality and access as well as lower expenditures. Of course many details have to be worked out in advance and incorporated into the Tenet/Vanguard contracts. Most important, there has to be agreement on how to divide up any positive and negative differences between budgeted net income and actual net income. This will work best if there is also close collaboration between the two parties in monthly monitoring of budget conformance. For more information about this approach, contact me at 215-561-5730. Regards, Bob Sigmond