After years of planning and months of public debate, Sacramento County has tapped Kaiser Permanente to open the region's next trauma center. Kaiser beat out Methodist Hospital of Sacramento, which had fought vigorously to win the trauma center nod. County officials have said that population growth requires the new trauma center by 2010, but Kaiser has announced it will open its center in 2008.
There are primarily two paths to growth in this or any industry. There's the organic variety whereby you grow your business through marketing, outreach and expansion into new regions. And then there's the fast-track approach of growing through acquisition.
The former entails a process of building relationships with business partners--be they providers, employers or individual enrollees--while the latter is based on acquiring a set of ready-made relationships. Success via the acquisition route, however, is dependent upon the successful integration of these relationships into your own operations. And there's the rub.
Officials with the Minnesota-based UnitedHealth Group issued a mea culpa of sorts recently, conceding that they mishandled the integration of some of their recent acquisitions. The result? A serious backlash from providers and enrollees alike--particularly in its PacifiCare operating unit--that is costing the company over a half million members.
"We pursued too much change, too fast, and the results were too disruptive," said David Wichmann, executive vice president at UnitedHealth, assuring analysts and investors that the most disruptive portions of the integration have already been completed. Wichmann says providers and consumers alike were alienated by the company's integration process, which included moves to shift call center operations overseas and to centralize provider relations rather than maintaining a network of regional representatives. Those moves are now being reversed, but much of the damage has already been done.
Ken Burdick, president and CEO of the company's UnitedHealthcare division, noted that the integration woes and other customer service problems would cause the United's membership rolls to shrink by over half-million members at the beginning of 2008--350,000 in risk-based membership and 200,000 in fee-based membership.
The member flight problem was most acute among those covered by its PacifiCare unit. In his presentation, Burdick noted that the unit is on target to lose 305,000 members this year and another 215,000 next year. The PacifiCare unit lost 135,000 members in the first year following the merger for a three-year total of 640,000 members.
Still, Wichmann and Burdick were optimistic that the company has turned the corner. Burdick said United is on track to boost its risk-based membership by 100,000 and its fee-based membership by 150,000 by the end of 2008. And Wichmann noted that the company has adopted a new attitude toward provider relations. "We understand relationships and we recognize that this is a health system that needs to work for everyone, not just for us," he said. "We're approaching negotiations in a much more inclusive and collaborative fashion and we're achieving comparable economic results."
Brad Cain is editor of California Healthfax and executive editor for managed care with HealthLeaders Media. He may be reached at bcain@healthleadersmedia.com.
The planned consolidation of Froedtert & Community Health with Columbia St. Mary's in Wisconsin would be the largest of its type since hospitals began forming healthcare systems more than two decades ago. The move will bring its share of challenges, but the two healthcare systems say religion will be a manageable one.
Fourteen medical centers nationwide have been selected to participate in the newly created NFL Player Care Foundation, which will provide access to world-class medical technology and financial assistance to vested players who need it. The program will be funded by the NFL Alliance.
A host of critics are demanding that nonprofit hospitals in Ohio like the Cleveland Clinic and University Hospitals do more to detail their acts toward public good, such as amounts of charity care. The IRS is also targeting the facilities for more information and reporting.
Cleveland-based MetroHealth Medical Center said earlier this year that it lost $8.9 million during the first nine months of 2007 in part because of uncompensated care it provided to a rising number of nonpaying patients showing up at the emergency room. Now community activists that are fearful the hospital is bearing too great a burden are planning to talk about solutions.