By Erika D. Smith, Akron Beacon Journal, Ohio Knight Ridder/Tribune Business News
Jan. 14--Akron General Medical Center is getting out of the technology business and getting back to basics -- caring for patients.
On Tuesday, the hospital announced it has sold its computer services network to NextMED Systems. The Cleveland-based company began handling billing, claims reimbursement and other services for about 350 doctors after the December transaction. The acquisition will not only free up Akron General's resources to focus on patient care, but create more than 100 jobs in the Akron area by 2005.
The NextMED deal is 'an example of strategically where we're going as an organization,' said Alan Bleyer, president and chief executive of Akron General Medical Center.
NextMED did not disclose terms of the deal, but did say it was the fruit of a long partnership with Akron General. The hospital started using the Cleveland company's services in October 2002, with an eye toward an eventual acquisition.
'We worked together with them to upgrade their old system,' said Phil Lara, vice president of NextMED. No jobs will be lost with the deal. All 12 employees from Akron General's network, called the Physicians Service Network, have taken jobs with NextMED. And more jobs are expected to be created next year. NextMED has about 75 employees in three offices in Summit County. By 2005, Lara said the company's operations will be consolidated in Fairlawn's Summit Medical Plaza (owned by Akron General) and boast 200 employees. NextMED can supply high-tech services the hospital cannot, said Alan Papa, Akron General's vice president of network services.
Under NextMED's control, doctors will have access to a new suite of special programs to help them do their jobs. 'We had known a long time ago that our capital was limited and we wanted to spend our capital on our core business,' he said. 'Patient care is what we should be spending our money on.'
In the 1980s and 1990s, the trend in health care was to create corporations that handled the whole spectrum of medical care, with hospital systems owning their own insurance companies, physicians' offices and pharmacies. Now, though, Akron General is taking that model apart. The new guiding principal is to sell off the parts of the system that don't focus on patient care. Such deals cut overhead costs. At the same time, Akron General can maintain a beneficial relationship with the buyer.
Akron General created a similar arrangement in July, when it got out of the insurance business by selling HomeTown Health Network for $13 million to the Health Plan of the Upper Ohio Valley. The deal, though, came with a contract guaranteeing that HomeTown's new owner won't send patients to Akron General's competitors.
NextMED also will refer patients to Akron General for an undisclosed period of time.
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(c) 2004, Akron Beacon Journal, Ohio. Distributed by Knight Ridder/Tribune Business News.
