UM enters the business of medicine Hospital, medical school join to deal with managed care

'Everyone must these days'

Challenge: Provide good medicine while staying competitive

March 25, 1996|By M. William Salganik | M. William Salganik,SUN STAFF

Like other academic medical centers seeking to thrive in a changing health care environment, the medical school and hospital at University of Maryland have formed a new entity to provide medical care and deal with managed-care organizations.

Called the University of Maryland Clinical Enterprise (UMCE), it will be headed on an interim basis by Dr. Robert A. Barish, professor of surgery and head of emergency medicine.

"We believe we have a structure that will enable us to go into the business of medicine, as everyone must these days to maintain financial viability," said Dr. David J. Ramsay, president of the University of Maryland at Baltimore, the campus that includes the medical school and the hospital.

"Today's marketplace, which places greater emphasis on pricing, demands that we become increasingly competitive, not only to be more responsive to patients, referring physicians and payers, but also to adequately fund our educational, research and community service missions," said Dr. Donald F. Wilson, dean of the University of Maryland School of Medicine.

Universities are seeking to create entities that can coordinate clinical functions of their medical schools and hospitals, moving nimbly to negotiate deals with doctors and insurers.

Several years ago, for example, Johns Hopkins created Johns Hopkins HealthCare. Earlier this year, Hopkins moved to make the coordination even stronger, saying it would create a new entity called Johns Hopkins Medicine, with its own board of directors and run by a medical "czar."

More and more, contracts between insurers and hospital networks involve "capitation" paying a flat monthly fee per subscriber, regardless of how much care the person needs.

Insurers like capitation because it shifts the risk to the provider; providers like it because it gives them more control and more profits.

"Essentially, every hospital and medical school wants to be able to accept a capitation rate and be in control of the delivery system," said Gerard F. Anderson, director of the Hopkins' Center for Hospital Finance and Management.

"Most academic health centers capable of forming networks are trying to, in order to provide access to a population of patients and to give [medical students and residents] experience in the community and in the ambulatory setting," said Roger Bulger, president of the Association of Academic Health Centers in Washington.

Hospitals without medical schools have been making similar moves building networks of primary care physicians and seeking managed-care contracts as in-patient revenues decline. But academic medical centers have a particular need: Patient revenue has historically subsidized research and training.

Pulling together several initiatives and adding a few new twists, UMCE will:

Operate primary care sites in West Baltimore. Dean Wilson said seven are in operation now, and "that's probably a good number" for university-run clinics, but "we hope to affiliate with more."

Acquire primary care practices. Recently, UM has purchased three practice groups, making about 15 physicians employees of UMCE. Faculty physicians remain employed by the medical school.

Offer management services to doctors. In addition to managing the practices of its own physicians, UMCE will offer a variety of services, such as billing, to other doctors. So far, three outside groups have been signed up. Dr. Wilson said about half a dozen people have been recruited for this part of the operation. In this area, UMCE will be competing with other hospitals, accounting firms and specialized companies which offer similar services.

Create several multispecialty clinics. One is under development at Shipley's Choice in Anne Arundel County. Dr. Wilson said the university is selecting a second site, and may have a third in the works within a year.

Contract with managed-care insurers. Dr. Wilson said the university already had "capitated arrangements" for full care, for primary care and for specialty care. An example of the latter is a large contract for cardiac care with Blue Cross and Blue Shield of Maryland Inc.

Pub Date: 3/24/96

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