Genesis, Blue Cross in deal Pa. firm to provide services to subscribers of Md. company

Health care

December 16, 1997|By M. William Salganik | M. William Salganik,SUN STAFF

Genesis Health Ventures, a Pennsylvania company with extensive operations in Maryland, announced a multimillion-dollar deal yesterday to deliver health care services to subscribers of Blue Cross Blue Shield of Maryland.

Genesis will provide:

Home health care -- including nursing, intravenous treatments and medical equipment -- to 275,000 subscribers to Blue Cross managed care plans. This includes members of the Blue Cross commercial HMOs -- FreeState, CareFirst, Delmarva and Columbia Medical Plan -- and Medicare and Medicaid HMO enrollees.

These services will be provided through NeighborCare, which began as a Baltimore pharmacy chain but is now a Genesis subsidiary offering a full menu of ancillary health services.

A full range of care to some 7,000 Medicare HMO members on the Eastern Shore. Doctors Health System, a large, Owings Mills-based network of doctors, will manage the care as part of the agreement.

A variety of skilled nursing and post-hospital care as a "preferred provider" to all of Blue Cross' 1.4 million members, including indemnity subscribers. Genesis owns morethan a dozen nursing homes in the Baltimore area, including those in the former Meridian chain that it bought in 1993, and a network of nursing facilities it does not own, but for which it can do contracting.

Genesis, founded in 1985, this year became the third-largest nursing home chain in the United States with a $1.4 billion deal with other investors to buy Multicare Cos. The deal doubled its nursing facilities to 290. Genesis, based in Kennett Square, Pa., had $1.1 billion in revenue for the fiscal year that ended Sept. 30.

In May, Genesis consolidated some other operations under its Baltimore-based NeighborCare subsidiary. "This is a validation of the model NeighborCare has been working on for years -- providing a seamless integrated system of care," Michael G. Bronfein, NeighborCare's chief executive officer, said yesterday.

By combining medical supplies and equipment, home intravenous therapy and home nursing, the company is able to offer managed-care insurers an attractive package of services.

This trend toward bundling related services also is a key strategy of Owings Mills-based Integrated Health Services, which has signed contracts with HMOs in other states to provide many types of care.

The Blue Cross contract, Bronfein said, marks "an acceptance by the market that this is more attractive than buying all the services separately."

Once a doctor has determined what a patient needs, Bronfein said, Genesis is able to coordinate scheduling, eliminate duplication and provide "consistency in care-giving."

Michael R. Walker, Genesis' president and CEO, said the Blue Cross contract was "the first step toward a long-term partnership, in which we anticipate working together to develop comprehensive services."

Bronfein also said Genesis will "absolutely" seek similar deals with other insurers.

Dr. Scott Rifkin, chairman of Doctors Health, said Genesis will receive a flat payment from Blue Cross, on a per-member, per-month basis under the Eastern Shore contract.

Doctors Health will provide care guidelines and help oversee care, Rifkin said.

Pub Date: 12/16/97

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