Care system to base in Columbia Helix and Medlantic launching BWHealth in affluent corridor

Health care

January 26, 1996|By Mark Guidera | Mark Guidera,SUN STAFF

Helix Health System and Medlantic Healthcare Group are teaming to create one of the largest health-care systems in the country, aimed at generating business in the potentially lucrative suburbs in the Baltimore-Washington corridor.

The two managed-care operations have chosen Columbia as the headquarters for their joint venture, to be called BWHealth. The name is yet another symbol of their interest in establishing a presence in the corridor, where neither has any operations now.

That interest is driven largely by the demographics of Howard, Anne Arundel and Charles counties. All three counties have high concentrations of wealth and of government workers and are favored by low unemployment and good job growth prospects, making them ripe for additional health-care services, said Helix and Medlantic executives.

"Columbia is the center of economic activity in the Baltimore-Washington corridor, and we are going to be very aggressive" pursuing business in that region, said James A. pTC Oakey, chairman and chief executive officer of Lutherville-based Helix, which manages five Baltimore area hospitals.

Columbia also is equidistant between Helix and Medlantic's corporate offices in Washington. That will allow easy access for executives to get to BWHealth, he said.

Annapolis and Laurel also were considered as headquarters sites.

John P. McDaniel, chief executive officer for Medlantic, and Mr. Oakey said BWHealth, which is being financed by both organizations, will first concentrate on integrating the medical and health-care services that Helix and Medlantic have brought to their partnership, such as Medlantic's strength in cardiac care at Washington Heart Hospital. Their goal is to bring more efficiency to each health system.

Helix Health's core service is community-based hospitals; it manages five hospitals and other health-care operations in the Baltimore area. Medlantic operates four advanced surgery and trauma centers in the Washington region.

BWHealth will work on merging the two organizations' information systems to trim millions from the estimated $25 million that each spends annually gathering and storing information on patients, hospitals and insurance.

BWHealth also will work on interesting physician groups, independent hospitals and managed-care operations in allowing BWHealth to manage their budgets and help control costs.

Such new customers would have access to all Helix and Medlantic services.

The BWHealth's headquarters is to be in the Woodmere I office complex on Broken Land Parkway. BWHealth has signed a three-year lease for 2,500 square feet in the Woodmere building. Initially, BWHealth will have a staff of about 12 people.

Mr. Oakey said he expects to name a chief executive officer for BWHealth soon and expects the new corporation to start operations by late February.

He predicted that the consolidation trend sweeping the health-care industry intensify in the coming months, and that BWHealth should be well positioned to capitalize on it -- in the corridor and elsewhere.

"In the next 60 to 90 days, I think we'll see the consolidation trend pick up in a big way," Mr. Oakey said.

Helix and Medlantic also are looking at the business potential elsewhere in Maryland. The joint venture, Mr. Oakey said, is particularly interested in the Eastern Shore, but he declined to give details.

Meanwhile, Helix has embarked on a review of the operations of the hospitals and other facilities it manages. The goal, said Mr. Oakey, is to pare $90 million out of a $650 million budget over three years.

Medlantic recently pared $70 million from its costs over three years, said Mr. McDaniel.

That organization realized its biggest savings by dropping health programs that were not self-supporting or were redundant, he said.

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