PACIFICARE: INKS MULTI-YEAR DEAL WITH SUTTER HEALTH
Two of California's largest health care providers haveThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
entered into a $450 million contract, San Francisco Business
Times reports. The second largest HMO in the state, PacifiCare
of California, has agreed to cover all 26 hospitals and almost
all of the doctor and specialty groups owned by Sutter Health,
one of the state's largest hospital systems (Rauber, 10/20
issue). Under the "global contract," PacifiCare "will pay Sutter
about $150 per year to take care of approximately 115,000 members
in Northern California," Sacramento Business Journal reports.
"The master contract offers multiple 'capitation' payment rates,
depending on the region," according to Sutter spokesperson Bill
Gleeson. The deal is "[b]elieved to be the first of its kind in
the state." For Sutter, it offers "new stability" and for
PacifiCare, it gives "both cost savings and expanded coverage for
Bruce Gorman, a local health care consultant, said, "Sutter
is quickly becoming the Northern California player, competing
with Catholic Healthcare West and the rest. You've got to admire
Sutter for doing something that others are just talking about."
According to Rick Badger, PacifiCare's general manager for
Northern California, the "master contract will offer
administrative simplicity instead of 30-odd separate deals with
different entities." He said, "It puts to bed the financial
terms for at least three years and opens the door to discuss
improved service to our members." Sutter spokesperson Bill
Gleeson said, "Everyone benefits from having a systemwide
provider that is committed to a stable multiyear contract"
(Robertson, 10/20 issue).
SAN FRAN OUT
Some San Francisco residents may be not be affected by the
deal. The San Francisco Business Times reports that "20,000
members of PacifiCare's Medicare HMO aren't covered by the
agreement" and neither is "the powerful 1,250-doctor Brown &
Toland Medical Group in San Francisco" (10/20 issue). Sacremento
Business Journal reports that California Pacific Medical Center,
also located in San Francisco, has been left out of the deal as
well. Gleeson said this is "due to legalities associated with
existing PacifiCare contracts" (10/20 issue).