Sierra Health plans 300-job office here Military dependents in 13-state area are company's clients

Regional headquarters

Many of the hires expected to be city residents

October 09, 1997|By M. William Salganik | M. William Salganik,SUN STAFF

Sierra Health Services, which last week won a $1.2 billion contract to coordinate health care for military dependents, yesterday said it will open a regional headquarters in Baltimore.

The move is expected to provide about 300 jobs.

Sierra, based in Las Vegas, Nev., last week won the five-year contract to provide care for dependents of active military personnel and for retirees and their dependents -- more than 600,000 people -- in a 13-state area stretching from Northern Virginia to Maine.

To land the regional headquarters, the city is offering the company an incentive package of about $500,000, said M. J. "Jay" Brodie, president of the Baltimore Development Corp., the city's economic development arm. Although details of the package are still being worked out, they will include job training and wage tax credits, and a loan to finance improvements to the office it leases, he said.

If Sierra meets goals for hiring city residents, half the loan will be converted to a grant, Brodie said. He said his office is also working with state economic development officials to provide additional support.

It is expected that a higher percentage of the hires will be city residents. Many of the jobs will be entry level or near-entry level, said Andrew B. Frank, senior development officer for BDC.

The Baltimore Development Corp. worked for more than a year to sell Sierra on Baltimore.

Sierra has set a target of hiring more than 40 residents from the Empowerment Zone who will come from a welfare-to-work program, said Joseph Lamarca, president of Sierra Military Health Services Inc. (SMHS).

About two-thirds of the jobs, Lamarca said, will be to staff a 24-hour customer service phone center. Other jobs here will include reviews of medical care needed and quality inspections.

In addition to staffing the headquarters operation, Sierra will employ about 150 other people at 31 service centers throughout the region, located on or near military bases. Two of those will be in Maryland -- one in Annapolis and the other near Patuxent River Naval Air Station in Southern Maryland.

SMHS, the entity that will make its headquarters in Baltimore, is a subsidiary of Sierra Health, a managed-care insurer. SMHS was formed in 1996 to bid on the Northeast regional contract for the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS).

The bid represented a high-stakes roll of the dice for Sierra, which grew from the cardiology practice of its founder and chairman, Dr. Anthony M. Marlon. He launched an HMO in Nevada in 1982, and the company went public in 1985.

The CHAMPUS program is in the process of switching to managed care, phasing in by region, with the Northeast last.

It took two years and $12 million to $15 million to prepare the bid, according to Lamarca.

By May, the company must have in place an HMO covering the entire Northeast. It will serve patients not at Sierra or CHAMPUS facilities, but through contracts with doctors, hospitals, labs and other providers.

Although operating largely like an HMO, the program offers enrollees more choices in return for co-payments and deductibles. Sierra chose Preferred Health Network, a 55,000-member health plan based in Linthicum, as a subcontractor to help put together its network.

Marlon said he does not necessarily see the military-dependant network as a springboard for Sierra to seek commercial or other business in the region. His concern for the first year or two, he said, would be to get the operation running smoothly.

Lamarca said Sierra will lease about 80,000 square feet and is considering two downtown buildings -- the Candler Building near Market Place and One Charles Center. Those are the only downtown buildings with enough available space. Office vacancies downtown are at a 10-year low.

Lamarca said a final announcement of the location could come as early as this week. Plans call for the headquarters to open in January and for all staff to be hired and trained by May.

Marlon said Sierra wanted a site convenient to Washington and the Pentagon, and had looked at about six locations in Virginia, Maryland, Pennsylvania, Delaware and the District of Columbia. "I don't think there was any one particular factor" that led to the choice, he said, but the team evaluating sites had decided that overall, "Baltimore was hands-down the best place to be."

Brodie said his efforts began "about a year ago, when we identified these folks as chasing a major federal contract." Sierra was seeking not just a good real estate deal but help in finding and training a work force, he said.

Mayor Kurt L. Schmoke, who welcomed Sierra in a City Hall press conference, said Sierra's decision to locate in the city "affirms Baltimore's role as a center for health care."

It also provides another upswing for downtown. Over the past few years, Sylvan Learning Systems, Bell Atlantic Corp., McDonald's Corp. and Crestar Financial Corp. and Alex. Brown Inc. have located or agreed to stay downtown. On the other hand, USF&G Corp. moved to its Mount Washington campus and T. Rowe Price expanded in Owings Mills.

Pub Date: 10/09/97

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.