Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, June 4, 1994 TAG: 9406060161
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: By LAURA WILLIAMSON STAFF WRITER NOTE: below
DATELINE: LENGTH: Medium
It wasn't supposed to be Roanoke's second HMO.
A group of Roanoke Valley employers had been planning for months to announce the successful wooing of Heritage National Healthplan to this region, only to lose their thunder Thursday to Carilion Health System, parent company of the valley's two nonprofit hospitals.
"Boy, were we surprised," said Lisa Craft, executive director of the Blue Ridge Regional Health Care Coalition, a nonprofit group representing 60 regional employers and 70,000 people.
"I had no idea they were going to make an announcement yesterday," she said.
The coalition's news release arrived by fax one day after Carilion announced it would create a health maintenance organization for Western Virginia through a partnership with Blue Cross and Blue Shield of Virginia.
Popular with employers across the country, HMOs typically offer less-expensive health insurance by paying doctors a predetermined fee for each person covered, regardless of the services they require. Patients usually make a small copayment for each visit to a doctor but are not covered for services they receive outside the HMO, or physician network.
Like Carilion's HMO, details of how the Heritage plan would work and how much it would cost were sketchy. For example, which hospital the plan will use still has not been determined.
A spokesman for Lewis-Gale Hospital, Carilion's only competition in Roanoke, did not return calls Friday. Earlier, however, the hospital said it had no immediate plans for forming an HMO, though it expected to see three in this region by the end of the year.
That leaves Roanoke Memorial and Community hospitals, which will be part of Carilion's plan. Carilion Senior Vice President Lucas Snipes said his company had not been contacted regarding the Heritage plan but that both hospitals would be willing to discuss the possibility of joining.
Doctors have not yet contracted for either plan but likely would be able to join both, representatives of each HMO said.
Heritage is a product of Illinois-based John Deere Health Care Inc., a subsidiary of tractor manufacturer Deere & Co. It serves 280,000 people in four states.
The Blue Ridge coalition won't own or take part in running John Deere's Roanoke HMO but will endorse it as its "HMO of choice," Craft said. Coalition members will receive a discount if they opt to purchase health care through Heritage.
The coalition has been trying to secure an HMO for the region for nearly a decade, Craft said.
Formed 10 years ago to look for ways to lower health insurance costs for employers, the coalition first tried unsuccessfully to bring Kaiser Permanente into the region, Craft said.
Since then, the employer coalition has created a hospital purchasing cooperative, begun a claims tracking project to compare physician services and begun forming a network of primary care doctors as a means of reducing health care costs.
Adding an HMO broadens the list of options to employers, said coalition President Dick Robers.
"What we're trying to do is provide them with a basket full of choices," he said.
Robers said the Heritage plan would differ from the HMO being offered by Carilion and the Virginia Blues because it would be designed by employers, not health care providers. Most of the coalition's members are self-insured, which makes them exempt from state laws governing health insurance companies.
That means employers can decide which services they want to cover, leaving out costly psychiatric care or other benefits in order to lower costs, said Robers, executive vice president of the apparel company Maid Bess Corp. Maid Bess has between 500 and 600 employees in the Roanoke Valley.
Snipes said Carilion also would allow employers some leeway in deciding what would be covered in its HMO.
The Carilion-Blue Cross HMO can be purchased by employers or individuals. The Heritage plan can be purchased by larger, self-insured employers or by small businesses that want Heritage to take all the insurance risks, but not by individuals.
Both will make services available beginning in January.
by CNB