Published: 27 January 2000
Analyst(s): Patrick J. C. Powers
Management Summary Louisville's healthcare market is once again beginning to move briskly toward more rational managed care. Two years after the legislative rollback of the financially disastrous state-mandated universal health insurance program, some insurers have re-entered the local and statewide markets. With the sale by Columbia/HCA Healthcare, the national for-profit hospital company, of its four area hospitals to the local hospital system Norton Healthcare, Louisville has a solidly not-for-profit hospital community. Although Norton Healthcare dominates the local provider market with seven facilities, competition for patients remains strong. The other three hospital systems have strong regional networks for referrals from rural facilities in northern Kentucky, southern Illinois and southern Indiana. After affiliating with a national management services organization (MSO), the area's largest independent physician association (IPA) is preparing to sign capitated contracts to do risk sharing. With its purchase of the Columbia/HCA hospitals complete, Norton Healthcare is setting out to solidify its position as market leader. Formerly known as Alliant Health System, the integrated delivery system (IDS) has spent the last year marketing its new brand name, which it carried over from its long-established major facility, Norton Hospital. As part of its strategy to increase patient volume at its seven facilities, it is marketing a one-stop insurance product for self-insured employers that combines medical and workers' compensation coverage. In exchange for significant discounts, employers must agree to restrict their employees to the Norton Healthcare network for acute care. The Louisville hospital market's transformation over the last two years from a market with three comparably sized hospital systems to one with three single-hospital systems and one large hospital system has not thus far reduced the intensity of competition. The trend toward outpatient...
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