Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, May 11, 1994 TAG: 9405120014
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: By LAURA WILLIAMSON STAFF WRITER
DATELINE: LENGTH: Medium
Under the arrangement, which will take effect during the next several months, Carilion and Bluefield each will invest $1.5 million in health care in Tazewell County in exchange for partial control of Tazewell's hospital board.
The deal should bring more doctors to a medically underserved area and help the Tazewell hospital stay in business, according to Tazewell Community Hospital Administrator John Greer.
Although the hospital was not in imminent danger of closing, Greer said it was becoming more difficult to stay in business as an independent hospital.
There is increasing pressure for smaller hospitals to join with larger ones as managed care becomes more of an industry trend, he said.
"If a hospital is not part of a network, then it's not going to be able to compete as a provider," he said.
Managed care plans establish networks of doctors, hospitals and other health services that are sold in packages to insurance companies or directly to employers. Carilion sells a variety of managed care plans in the Roanoke and New River valleys.
This is the first time Carilion will offer managed care to customers in far Southwest, Senior Vice President Lucas Snipes said. The health insurance plans, however, will be separate from those offered under Carilion's managed care division, with profits being split three ways between members of the alliance. Carilion and Bluefield each will put $1 million into the managed care organization.
With a network of three hospital systems, customers in Tazewell County will be able to buy health insurance packages that offer them all levels of care, Greer said.
He said Tazewell Community would provide primary care, Bluefield would provide care for more serious illnesses and Carilion - through Roanoke Memorial or Community Hospital - would provide critical care.
The alliance also will mean more doctors for a rural area that suffers from a health care shortage. Under the agreement, $1 million of Bluefield's and Carilion's investment will go into physician recruitment and construction of a medical office building.
"Tazewell needs at least five or six more doctors - minimum," Greer said.
Currently, 10 doctors serve the Tazewell community, which has a population of more than 45,000 people, Greer said. Half of those are primary care physicians.
"The rural communities are having a devilishly difficult time recruiting physicians," Snipes agreed.
In exchange for the investment, Carilion and Bluefield each will be given two seats on Tazewell Community's board of directors. The board, which now has 13 members, will be reduced to 10, Greer said.
Tazewell Community has 56 licensed beds and 10 physicians on staff. Bluefield Regional Medical Center has 256 licensed beds and 120 physicians on staff. Carilion, which owns 13 hospitals in Central and Southwest Virginia - including Roanoke Memorial and Community hospitals in Roanoke - has 1,886 beds in its system.
Under the arrangement, all three organizations will remain nonprofit. Carilion, which has managed Tazewell Community for 13 years, will continue to do so.
Snipes said the managed care alliance with Tazewell and Bluefield is in no way related to a managed care partnership being discussed with Blue Cross and Blue Shield of Virginia. Those talks are still under way.
by CNB