Seven Health Care Providers Form Alliance to Reduce Costs, Share Best Practices

Some of the region’s largest health care providers are forming the largest health care consortium in the country — AllSpire Health Partners. Hackensack University Health Network is a charter member in the alliance and its President and CEO Robert Garrett told NJ Today Managing Editor Mike Schneider that he believes the partnership will reduce costs while enhancing services for patients.

Garrett explained that the partnership isn’t a merger but an alliance between seven leading health systems — Hackensack University Health Network, Atlantic Health System and Meridian Health in New Jersey and Lancaster General Health, Lehigh Valley Health Network, Reading Health System and WellSpan Health in Pennsylvania.

While Garrett said the implementation of the Affordable Care Act was part of the reason for the alliance, it wasn’t the only one. “There’s been a lot of consolidation in the industry to really achieve three goals. One is to make health care more affordable, to make it more accessible and to make the patient experience a better experience,” he said.

Some worry that as health care providers get bigger, they may get impersonal. But Garrett said with seven systems know for quality, they can share best practices to help patients.

“We have a big bone marrow transplant program. We do a lot of research. We’re on our way to become designated as a comprehensive cancer center by the National Cancer Institute. So all of the research protocols that come to Hackensack by virtue of those types of affiliations and stature can really be now shared with these other six systems,” Garrett said. “Lancaster, as an example, is very well known for some of their innovations in the care of diabetics and diabetes. And that’s something that can be shared amongst the group as well. So there’s really some significant benefit that will accrue directly to patients in a pretty short order.”

Savings will come in the form of centralized distribution sites and forming a group purchasing organization, not cutting back on services or staff members. “There’s no anticipation that services will be cut at all. As a matter of fact, I think services can be enhanced through the sharing of best practices. But I think there’s really an opportunity to become more efficient and save the consumers money,” Garrett said.

While there may be some overlap in service area, Garrett said there isn’t much competition. He said the geography of the groups makes them complementary. There are no antitrust issues either, because the arrangement isn’t a merger.

Garrett said the organizations haven’t thought about merging. “A merger has its pros and cons certainly. I think this achieves a lot of the aspects of what you can achieve through a merger — through shared savings, through access to care and improved health care — without actually having to take on some of the obligations of a merger. So I think it’s kind of the best of both worlds,” he said.

Hackensack University Health Network has about 10,000 employees and Garrett said there will be no layoffs as a result of the alliance.

Oct. 1 begins the implementation of the Affordable Care Act, or Obamacare. Garrett said his organization is ready for what’s ahead. “The formation of this AllSpire Health Partners is a good way to get ready because it’ll provide opportunities for us to become more efficient, for us to be able to provide general health to the population,” he said. “There’s over 6 million people served just through AllSpire. So I think that prepares us very well for the health care reform that’s being implemented next month.”