NORTH CAROLINA: Kaiser Dumps Operations in the Triangle

      Partners National Health Plans of North Carolina has agreed to buy Kaiser Permanente's HMO in the Raleigh-Durham-Chapel Hill Triangle for an undisclosed sum, the Charlotte Observer reports. The deal stands to make Partners, owned by Novant Health, one of the largest health insurers in the state if it is able to keep most of Kaiser's 73,000 local members. The organization has already taken a large step to that end, having struck a deal with the 48 doctors and 24 physician assistants and nurse practitioners that make up Kaiser's Triangle medical group -- who will stay together as the Carolina Premier Medical Group -- to continue providing care to their patients if they switch to Partners. "That's the plum that comes with this," said Partners Vice President Stuart Veach (Jamieson, 8/18). Partners said it will also "honor Kaiser's state contract next year, which includes a 4.2% rate increase, one of the lowest increases among HMOs covering state workers." Analysts applauded the move. Dave Garbrick, a consultant with Towers, Perrin, said, "If you're going to grow in this state as an HMO, you definitely have to be in the Triangle. This gives Partners a very competitive position to become a powerful statewide vendor." William M. Mercer's Steve Graybill added, "It will be interesting to see if they can control the costs as they convert the Kaiser members" (Wolf, Raleigh News & Observer, 8/18). Partners has distinguished itself recently: Last year, it was the most profitable HMO in the state, earning $9.6 million on $360 million in revenue. Veach said Partners would like to broaden its membership in Charlotte as well, although it did not make a bid for Kaiser's Charlotte operations earlier this year, when it was scooped up by Principal Health Care. He said Kaiser's Charlotte business only served half the number of members as in the Triangle, and that the Charlotte doctors are "breaking up their practice," making contracting more difficult (Charlotte Observer, 8/18).