UMass Memorial, Baystate Vague On Alliance Details
In the two months since UMass Memorial Health Care and Springfield-based Baystate Health announced they were exploring a potential collaboration, the two hospital systems have said little about how they might join forces to realize efficiencies and improve quality, as UMass spokesman Robert Brogna said was the intention back in September.
Both health care systems, which dominate the field in Central and Western Massachusetts, have said they're not exploring a merger, but there are several other ways health care systems can link up, according to spokesmen from both Baystate and UMass.
Benjamin Craft of Baystate said in October that the crux of the potential collaboration with UMass includes pooling the patient populations of the two systems. This will ensure both will have access to federal grant opportunities not available to them now because their respective populations fall short of size requirements. Beyond that, Craft said there were no further details to share.
Brogna expanded on that, saying there are different types of opportunities the two systems would have access to by pooling their patient populations, and it's not limited to grants. Brogna said hospital systems will often collaborate on research projects that can shed light on health issues across a population. But he declined to discuss specific initiatives UMass and Baystate may collaborate on.
It's clear from the statement released Sept. 26, when a potential collaboration was announced, that saving money has at least something to do with the relationship the two health care systems are exploring, and collaboration areas could include clinical work.
“As national healthcare reform has brought an urgent imperative to transform the delivery and financing of health care, health care systems and hospitals across the country are collaborating in innovative ways, finding new efficiencies and better care solutions by sharing clinical experience and intellectual resources,” Brogna said.
The statement also noted that UMass and Baystate have provided support to one another in the past in the areas of pharmacy, quality, clinical practice and policy, and infusion medicine.
A Deeper Relationship?
But could a new relationship between UMass and Baystate go deeper?
According to Brett Hickman, U.S. health industry deals leader at PricewaterhouseCoopers LLP (PwC), an auditing and consulting firm headquartered in New York City, the scope of collaboration possibilities between health systems is quite large. Outside a traditional merger, deals can range from ambulatory functions, to joint operating agreements, to forming health plans together, according to Hickman.
The Next Big Thing
Right now, Hickman said the trend toward systems forming provider-based health plans together is particularly hot.
Though he was not addressing the relationship between UMass and Baystate specifically, Hickman said many systems are forming joint, provider-sponsored health plans in order to spread risk among a larger population.
“A lot of folks may call it an (accountable care organization) but in many cases, there's a vehicle behind it. And in many cases that's a provider-sponsored health plan to take on risk,” said Hickman.
Provider-sponsored health plans have become more popular as the health care system has begun the transition from a fee-for-service to a managed-care model. This means insurance companies are setting reimbursements based on a certain patient population size, and not for actual services rendered, as has been the case traditionally. As a result, provider-sponsored health plans give providers the ability to manage their patient populations in a financially advantageous way.
Whether UMass and Baystate are pursuing this type of alliance remains to be seen. Brogna, the UMass spokesman, did not respond to requests for comment on the potential for such a deal. UMass has also declined to comment on the formation of an accountable care organization, known as UMass Accountable Care Organization Inc., according to incorporation papers filed with the Massachusetts Secretary of State's office in May.
The possibility that UMass and Baystate will look for shared grant opportunities, as Brogna and Craft said, could relate to patient population management.
Hickman said there's a “litany” of commercial and federal grants available right now, many of them designed to pilot different reimbursement models and ways to manage care for large patient populations.
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