Sinai joins Prudential to lure Medicaid patients patients to an HMO. Basic care, hospital services included

August 19, 1993|By Patricia Meisol | Patricia Meisol,Staff Writer

Sinai Hospital joined forces with Prudential Health Plan yesterday, opening a primary care facility to serve Medicaid recipients who enroll in Prudential's health maintenance organization.

Prudential hopes to attract 5,000 people to its plan through the new facility, a renovated wing of a building on the hospital's Northwest Baltimore campus.

Doctors at the site will provide basic health care, referring patients as needed to specialists, to the hospital or to ancillary services, such as X-ray and lab services owned by Sinai.

Under the agreement with Sinai Care Inc., a corporation formed by 450 doctors practicing at Sinai to negotiate for the hospital with managed care companies, the facility has agreed to treat a set number of patients for a monthly fee.

Hospital fees, however, would continue to be charged on the basis of individual use as required by the state's hospital cost review commission, officials said. Financial details of the agreement were not disclosed.

For Sinai, the facility holds the promise of new patients and increased demand for services at a time when hospitals generally are facing declining occupancy and revenues.

For Prudential, it is an opportunity to expand its share of the growing Medicaid HMO population. The insurer also hopes the program will be a model of providing a continuum of health care -- fromthe primary care of an HMO to the more sophisticated treatment of a hospital -- that can be expanded to the private sector.

With health care reforms on the horizon, "we have to serve all Americans, not just those employed. So it behooves private insurers to be innovative and develop programs to serve Medicaid and people who are on Medicare and people who are in the gray zone," said Barbara B. Hill, president of Prudential Health Care Plan of the Mid-Atlantic.

One in four residents of Baltimore and one in 10 persons statewide receives Medicaid, a federal program that provides health care to low-income people. Most receive health care on a fee-for-service basis, for which the government pays separately for each medical need. Managed-care programs, in contrast, cost the government a flat per-person fee regardless of what services are needed.

Prudential, which insures 43,000 Medicaid patients, is one of four HMOs approved by the state to provide care to Medicaid recipients. It serves 55 percent of Medicaid recipients who have selected an HMO.

The partnership with Sinai allows Prudential to attract new members by offering high-quality care through Sinai, Ms. Hill said, while Prudential can help show Sinai how to make a transition from the traditional fee-for-service payment method to managed care.

The Medicaid model can be used for employer-paid health plans as well, she said.

The bulk of Prudential's business is with privately paying customers.

More than 500 Maryland employers contract with Prudential.

The Sinai agreement is the second contract by Prudential with a hospital-based group of doctors to provide basic health care. It has a similar arrangement at Liberty Medical Center and expects to begin serving Medicaid patients at a clinic operated by doctors at Harbor Medical Center next month. It also contracts with doctors from Johns Hopkins Hospital at a clinic outside the hospital campus.

Prudential estimated there are as many as 30,000 people in Northwest Baltimore who are eligible for Medicaid and could join the new HMO. This also could reduce the cost of care for those who use hospital-based clinics or emergency rooms, since treatment is often worsened by lack of routine, primary care.

Art Wieland, senior vice president and chief financial officer of Sinai, said the hospital plans to let the clinic grow slowly and expects to reach 3,000 people in the first year. It could eventually serve 8,000 a year.

"The theory here is that we will provide a continuum of care from prevention to inpatient [hospitalization], all under direction of one team of physicians. That's where we see the real benefit," he said. "We should be able to reduce the health care utilization simply by emphasizing preventive care."

He said financial benefits won't be known until the facility has been open a few months, but the center is expected at least to pay salaries of three staff doctors.

Sinai Hospital last year earned $3.3 million on revenues of $250 million.

The Prudential agreement was arranged through Sinai's doctors group because state regulations prohibit hospitals from discounting rates with individual insurers.

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