2 firms join in health partnership

July 12, 1994|By Patricia Meisol | Patricia Meisol,Sun Staff Writer

Two of the state's largest home-health care agencies said yesterday that they would create a partnership to help them compete for managed-care business in four states and Washington.

The deal, reached between the Silver Spring-based Adventist Home Health Services Inc. and Bay Area Health Care Inc. of Baltimore, comes as managed-care companies begin aggressively to recruit the segment of the population that most uses home health agencies -- people insured by state and federal Medicaid and Medicare insurance programs.

Up to now, hospitals controlled the flow of patients into home health agencies. Increasingly, however, insurers, including health maintenance organizations and other managed-care companies, are taking control of where their members go after leaving the hospital by directly contracting with home health agencies.

As a consequence, home health agencies are trying to refashion themselves to appeal more to these managed-care companies.

In recent months, the largest home health agency in Maryland, the Visiting Nurse Association, was acquired by a group of hospitals and medical companies. And in a separate move, 11 smaller agencies banded together for the purpose of statewide contracting.

Adventist, part of a company that owns Shady Grove Adventist Hospital, and Bay Area, a unit of a physicians' practice group at the University of Maryland Medical Center, reported combined revenues of $25 million last year.

Together, the two companies expect to visit a total of 270,000 patients at home this year, making it the largest player in the region.

Under the terms of the agreement, the two companies would create an entity, based in Columbia and as yet unnamed, to handle all future contracts with managed-care companies. Eventually, the companies' management could be merged.

"This is holding hands before you get married," said David McDaniel, executive director of Bay Area. "I see a lot of things you could share," he added.

Initially, for instance, his company would help Adventist develop rehabilitation and psychiatric services, he said. Adventist, in turn, would help Bay Area develop an intravenous drug treatment program. Ultimately, the new company expects to offer a full line of home care services.

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