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The ink is still drying on 4 of the most interesting deals in healthcare

Several health systems have formed new relationships with one another in the past week. Consolidation of healthcare providers is nothing new, but the four deals below involve some unique circumstances or affiliation structures.

1. Anthem Blue Cross, California hospitals to form joint venture
The players: The joint venture includes health insurer Anthem Blue Cross and seven California health systems, including UCLA Health System, Cedars-Sinai Medical Center and Good Samaritan Hospital — all based in Los Angeles. Huntington Memorial Hospital in Pasadena, Fountain Valley-based MemorialCare Health System, PIH Health in Whittier and Torrance (Calif.) Memorial Health are also part of the joint venture.

The deal in a sentence: As part of their joint venture agreement, Anthem and the health systems will form a new provider network and health plan called Anthem Blue Cross Vivity, which will resemble an HMO and become available to large employers starting in 2015.

Hospitals involved: The Vivity network will include 15 hospitals. All seven participating hospital systems have been ranked in the top 30 in the Los Angeles and Orange County regions by U.S. News & World Report.

What makes it interesting: The joint venture is unique in that it involves competing hospitals and health systems that aren't owned by the health plan. Anthem will also continue to offer other health plans, and Vivity providers will still be free to contract with other insurers.

2. Advocate, NorthShore merger to create 16-hospital system
The players: The deal involves Evanston, Ill.-based NorthShore University Health System and Downers Grove, Ill.-based Advocate Health Care.
 
The deal in a sentence: After receiving regulatory approval, the deal would dissolve the NorthShore and Advocate systems in their present form to create a consolidated system called Advocate NorthShore Health Partners.
 
Hospitals involved: The new system will have 16 hospitals. It will be the largest health system in Illinois and the 11th largest nonprofit system in the country.
 
What makes it interesting: Advocate is twice the size of NorthShore, but under the deal it will represent 50 percent of the new company's board. At the same time, through a cashless transaction, Northshore will control 50 percent of the state's largest health system. Also, NorthShore President and CEO Mark Neaman and Advocate President and CEO Jim Skogsbergh will serve as co-CEOs for two years before Mr. Skogsbergh takes the reigns as primary CEO — a unique leadership arrangement.

3. Vidant Health, Wake Forest Baptist and WakeMed form three-system company
The players: The three North Carolina systems are Greenville-based Vidant Health, Raleigh-based WakeMed Health & Hospitals and Winston-Salem-based Wake Forest Medical Center.
 
The deal in a sentence: The systems are forming a shared services operating company, which falls short of a merger or acquisition, and will let the systems maintain independent, retain their current governance structures while gaining benefits of scale.
 
Hospitals involved: Vidant Health and WakeMed each include eight hospitals, while Winston-Salem-based Wake Forest is an integrated medical campus with more than 1,000 acute-care beds.

What makes it interesting: The systems, which are not direct competitors, said the relationship is intended to alleviate financial pressures from declining Medicare and Medicaid reimbursement, particularly since North Carolina did not expand Medicaid under the healthcare reform law. Also, the Triad Business Journal reported the deal resulted from casual hallway conversations among the systems' executives during a North Carolina Hospital Association meeting. The new company has yet to be named.  

4. CHI Franciscan Health, Virginia Mason and others form health network
The players: The Washington network, which will be managed by First Choice Health Care in Seattle, includes  Tacoma-based CHI Franciscan Health; Edmonds (Wash.) Family Medicine; The Everett (Wash.) Clinic; Kirkland-based EvergreenHealth Partners; Bothell-based Lakeshore Clinic; Bellevue-based Overlake Medical Center and Seattle-based Virginia Mason Medical Center.

The deal in a sentence: The Puget Sound High-Value Network stretches from Everett to Tacoma and will essentially function as an accountable care organization for employers.  

Hospitals involved: The network includes eight hospitals, 163 clinics, 24 ancillary provider locations and 2,875 physicians.

What makes it interesting: Unlike other health care network offerings in the region, PSHVN providers are selected to participate based on a commitment to providing high-quality care at a reduced unit cost. The network is available to self-insured employers with 50 or more employees.

 

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