THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, October 8, 1994 TAG: 9410080322
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY LON WAGNER, STAFF WRITER
LENGTH: Medium: 80 lines
Three years ago when Sentara Mental Health Management lost a bid to provide psychiatric services to state workers, the company began working to win the contract the next time around.
Norfolk-based Sentara, a dominant health care provider in Hampton Roads, was a nonplayer in most other parts of the state. It had to build a mental health network from Norfolk to Alexandria to Danville to Bristol. And Sentara had to do it the hard way: knocking on doors, asking top-notch psychiatrists, psychologists, clinicians and hospitals to come under its umbrella.
At 4 p.m. Thursday, Sentara learned its three years of hard work had paid off. The nonprofit Norfolk company had snatched the contract from Trigon Blue Cross Blue Shield.
The importance of winning the state's hotly contested mental services contract can't be understated for Sentara. The contract will nearly double the number of potential patients in Sentara's mental health group.
Sentara now provides mental health services to 212,000 people. State employees, their spouses and children will add another 190,000 people.
``We've been working and working and working,'' said Jack McNamara, president of Sentara's Managed Care Division. ``We've been hanging by the phone for threeweeks. This is very exciting for a small, home-grown company.''
How Sentara put the rest of the deal together shows how health care providers are scrambling to win more business. Health care companies are finding that the most efficient way to plug gaps in the services they offer is to join forces with other companies, rather than build from the ground up.
Sentara strengthened the network it had built by joining forces with Green Spring Health Services Inc., a Columbia, Md.-based national mental health services provider that covers nearly 10 million people. Green Spring approached Sentara six months ago and floated the idea of submitting a joint bid.
Green Spring was just one of several national health care companies that wooed Sentara. The state apparently had been upfront about how close Sentara came to getting the contract three years ago. Sentara executives said they were contacted by at least three national outfits.
But what could Green Spring add? The bureaucracy, or more precisely an already developed computer system to link the provider network Sentara had so painstakingly assembled.
``We were trying to decide whether we wanted to go with a national company or go it alone,'' said Nancy Eleuterius, president of Sentara Mental Health Management. ``I think the most important thing was we had a philosophical approach that was similar - it was like you were reading each other's materials.''
Green Spring could have vied for the contract on its own, but there's a presumption among bidders that the state prefers to give its business to companies located in Virginia. Not only that, but Green Spring would have had to assemble in six months the network that Sentara had spent more than two years developing.
``Health Care is a local phenomenon,'' said Bill Tenhoor, vice president of sales with Green Spring. ``A company that doesn't have a local delivery system is out.''
Two of the companies that lost out on the state's mental health contract can take solace in the ironies of the consolidating health care industry.
Blue Cross of Virginia was beat out by the Sentara/Green Spring team, but Green Spring is part of the national Blue Cross family. It is owned by six Blue Cross and Blue Shield plans in Illinois, Pennsylvania and New Jersey.
And Norfolk-based First Hospital Corp., whose Options Mental Health plan was a finalist for the contract during the past two bids, holds the mental health services contract for state employees in Maryland. Green Spring's Tenhoor didn't need to be reminded that First Hospital beat out Green Spring in its own back yard.
But First Hospital spokeswoman Nancy Grden said that was a small consolation.
``Options has been selected to manage the mental health care in several other states - Maryland, Michigan, the city of Atlanta - and we really wanted to be able to do the same in our own state,'' Grden said. by CNB