The Medical Center and New York Life Insurance Co. have signed an agreement to operate a new regional health-care management and benefits company that will focus on providing access to a range of health-care products and programs--including its own health maintenance organization.
The new company, WellPath Community Health Plans, is considered one of the nation's largest joint ventures ever undertaken between an academic medical center and a managed care organization. "It could be a model for a private sector solution to preserve the high quality care provided at U.S. teaching hospitals," said Anna Lore, chief executive officer of WellPath, in a statement.
The signing of the joint agreement took place last Thursday after state insurance regulators approved New York Life's application to operate the HMO. The license authorizes Sanus Corp. Health Systems, the Durham-based subsidiary of New York Life, to do business as an HMO in 44 North Carolina counties, including the Raleigh/ Durham, Greensboro/Winston-Salem/High Point and Charlotte markets. HMOs focus on providing quality health care while containing costs by requiring beneficiaries to seek care initially through a primary care doctor, who acts as a "gatekeeper" and refers patients to specialists if needed.
With the signing of the joint venture, WellPath officials said they expect the state to approve the Medical Center as a partner in the HMO venture.
University employees who are currently served by the Duke Managed Care Plan, which Sanus also administers, will not have to change plans because the HMO will offer a similar plan.
The Medical Center's leadership is excited about the new joint venture, citing the valuable combination of Duke's medical muscle and New York Life's practical business experience.
"It's the most effective way for us to deliver outstanding managed care with an extremely experienced partner in managed care plans," said Dr. Ralph Snyderman, University chancellor for health affairs. New York Life, a Fortune 500 company which is celebrating its 150th anniversary this year, is the nation's fourth largest life insurance company by assets. Its managed-care operation is a leader in the health and employee benefits business, serving more than 3.5 million people nationwide.
Some question whether the specialist-heavy Medical Center will be able to provide preventive care and primary care to HMO beneficiaries. Snyderman said he feels the Medical Center is prepared for this shift, with a network of at least 100 primary care providers across eastern North Carolina and the Center for Living, which provides preventive medical services and health education.
"From the common cold to heart transplants... We can take care of people's every need as it relates to health care," Snyderman said.
The joint venture will also help stabilize the Medical Center's revenues, which have been in limbo as a result of federal funding reductions and competition from other managed care organizations. By capturing a greater share of the market, the Medical Center will be able to continue its commitment to its research mission, he said.
In addition to the HMO, Wellpath will offer preferred provider and point-of-service plans, in which members retain more freedom of physician choice; administrative planning services for self-insured employer groups; traditional health insurance with a managed-care component; and other employee benefits such as life insurance and disability programs.
The financial terms of the agreement were not disclosed. The company's board will consist of three members from Duke and three members from New York Life/Sanus.
The joint HMO will compete for beneficiaries with 14 other HMOs in the Triangle, according to WellPath Community Health Plans. But the HMO is distinguished by its unique relationship with a leading medical center.
"Other communities across the nation clearly will be watching our progress in North Carolina," said Dr. Mark Rogers, chief executive officer of Duke Hospital and Health Network, in a statement. "This alliance with New York Life will give our hospital the ability to deliver quality health care in a manner that will help keep our services affordable."
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