CHARLESTON -- Two HMOs have combined their resources to service the regional Stone & Thomas account.
The Health Plan of the Upper Ohio I Valley and Carelink are working together to provide health maintenance organization (HMO) services to Stone & Thomas employees in West Virginia, Ohio, Kentucky and Virginia.
The partnership is the first of its kind for both HMOs.
Based in Charleston, Carelink has a strong provider network in southern West Virginia. With headquarters in St. Clairsville, Ohio, The Health Plan of the Upper Ohio Valley is deeply entrenched in the northern part of the state.
To win the contract, the HMOs had to have a provider network in place to serve Stone & Thomas employees in West Virginia and surrounding states,
'We needed to have both
HMOs
on board for it to work for Stone & Thomas,' said Mike Baker, a Carelink account executive.
The Health Plan decided to ask Carelink to join with it for the Stone & Thomas account because of Carelink's affiliation with Charleston Area Medical Center (CAMC), the state's largest hospital, said Terri Magruder Kahle, an account executive with The Health Plan of the Upper Ohio Valley.
To get the business, The Health Plan knew that it had to find a way to offer healthcare services at CAMC and with its physicians to Stone & Thomas employees in the Kanawha Valley, Kahle said.
'That's what enticed Stone & Thomas to take us instead of other competitors,' Kahle said.
Stone & Thomas, a department store chain with headquarters in Wheeling, has more than 1,800 employees. About 700 of these employees participate in the company's health insurance plans. All employees who work more than 20 hours a week are eligible, said Susan Stepputtis, corporate personnel manager for Stone & Thomas.
The company hired the HMOs to administer its self-insured health benefits plan.
Stepputtis said that Stone & Thomas has offered managed care options periodically to its employees since 1988.
'We've always felt that managed care gave us the biggest bank for our buck,' Steppittus said.
Stone & Thomas had worked with The Health Plan over the years for other insurance options and was impressed with that company's ability to keep costs down. The joint venture with Carelink made The Health Plan's proposal even more attractive because of Carelink's affiliation with CAMC and its contracts with physicians and hospitals in the Huntington and Bluefield areas.
Alan L. Mytty, president and CEO of Carelink, characterized the arrangement between the normally competitive HMOs as 'mutually beneficial.'
Stone & Thomas opted for two types of health coverage for employees.
In markets such as Charleston and Wheeling where the HMOs have strong provider networks in place, the department store chain set up a traditional exclusive provider organization.
In markets such as Parkersburg where the HMOs still are building their provider networks, Stone & Thomas set up a point of service system. The department store offers big incentives for employees to go to physicians and health-care providers within the network, but also covers care they seek outside the system.
To service the account, the HMOs have had to work out differences in their systems so that coverage is 'seamless' for Stone & Thomas employees across the state, Baker said.
'We hope to the
participant
that it is blind -- that there's no difference between the two plans,' said Beverly Begovich, vice president of health services for Carelink.
The Health Plan of the Upper Ohio Valley approached Carelink about sharing resources to service the Stone & Thomas account during the fourth quarter of 1995.
The HMO coverage went into effect Jan. 1, with the contract running over two years.
'It really was a huge undertaking to ensure that we minimized the bugs in the system for the people enrolled,' Mytty said. 'I think that having done it once it will make it easier to do in the future.'
The Stone & Thomas account is the first self-insured HMO account that Carelink has administered.
Membership cards distributed to Stone & Thomas employees reflect the participation of both HMOs in administering the account.
'I think it will give Stone & Thomas the ability to see what managed care is and how it can work and how it can work well.' Mytty said.
In business since 1979, The Health Plan of the Ohio Valley covers about 77,197 people in Ohio and West Virginia, according to the latest available quarterly financial statement filed with the state. In 1994, the plan had a yearly profit of $5.9 million on total revenues of $89.4 million.
A newcomer to the HMO industry, Carelink has been in operation since 1994. The HMO reported a loss of $617,319 in 1994 with revenues of $52,597. Through the third quarter of 1995, Carelink covered about 12,181 people and posted a $2.3 million loss with revenues of about $4.6 million and expenses of about $6.9 million, according to the latest available quarterly financial statement filed with the state.
'At this point, it hasn't affected any competition we've had with Carelink,' Kahle said. 'Our service areas don't overlap....
But
I can't promise they won't overlap between the two HMOs in the future.
'We're looking forward to ongoing partnerships with Carelink,' Kahle said. 'This might be the start of something good.'
