WSJ story may finally explain why CHI wants hospital merger with Jewish, U of L
(Editor’s note: This post was updated at 9:10 p.m. on December 13. The original version misidentified CHI executive Paul Edgett III.)
It figures the out-of-town newspaper would get the most cooperation.
The Wall Street Journal, not the Courier-Journal, has one of the most complete stories yet on the pending hospital merger as part of a package on the future of U.S. health care.
The drop head for this installment goes to the heart of what’s happening: “What is a hospital? An Insurer? Even a Doctor? All the Lines in the Industry are Starting to Blur”
The story, by Anna Wilde Mathews, quotes at length Dr. Jim Taylor, University of Louisville Hospital CEO, who reiterates U of L executives’ point that without the merger, a lot of indigent patents are going to get swallowed up by the shifting sands of health care.
But the most insightful graphs include rare quotes – though indirect quotes – attributed a CHI official at CHI’s Nothern Kentucky/Ohio headquarters in Covington, Ky., where execs are notoriously media adverse. (Insider Louisville has repeatedly contacted CHI executives for comment, but recieved no acknowledgement.)
In this case, it’s someone named Paul Edgett III, who’s a senior VP:
The new system will be able to integrate patients’ care and to take on the financial risk tied to overseeing groups of patients, says Paul Edgett III, a Catholic Health Initiatives senior vice president. It will look at “warranty”-style payments, he said, under which a set sum is paid for an episode of care, including any complications. Such setups, under which hospitals can sometimes lose money if costs run too high, move hospitals into a space that has largely been the purview of health insurers.
This may be as close as the public ever comes to getting an answer to the one question no reporter has been able to answer: Why does CHI want to do this deal with Jewish Hospital & St. Mary’s Healthcare and University of Louisville Hospital?
We know why JHSMH and U of L want to do it. The Jewish system is broke, and U of L is on the hook for indigent care.
Suddenly, the WSJ story makes the deal make sense … CHI executives will bulk up the already large system in order to turn CHI into more of a managed-care health insurer/health provider a la for-profit systems. In one fell swoop, CHI officials add essentially the 4 million population of the state of Kentucky to its potential patient base, spreading risk while adding Jewish hospitals in affluent areas to balance out losses.
In the end, the merger is really about the coming showdown between health insurers and health providers, and who has the clout and the critical mass.
All that aside, for insiders, the most interesting bit in the WSJ story may be the paragraphs tying health insurance premium contributions to employees’ health-risk factors. Employees who score poorly on measures such as cholesterol, blood pressure, body-mass index and tobacco pay more each week … an idea whose time has come?