BJC ends relationship with long-time ER contractor

Aug. 06--BJC -- HealthCare has hired Knoxville, Tenn.-based TeamHealth to operate nine of its emergency departments.

Under the agreement, TeamHealth takes over ERs at Alton Memorial; Barnes-Jewish St. Peters; Boone Hospital Center in Columbia; Christian Hospital; Northwest HealthCare in Florissant; Missouri Baptist Sullivan; Progress West in O'Fallon, Mo.; and Parkland Health Center in Farmington and Bonne Terre.

Neither TeamHealth nor BJC would comment on the value or duration of the new contract.

The move ends BJC's long-term relationship with Emergency Consultants Inc., part of Traverse City, Mich.-based ECI Healthcare Partners.

The length of the contract between BJC and ECI varied by hospital. In some cases the duration was less than nine years and others about 20 years, according to Kim Kitson, BJC spokeswoman. ECI declined to comment.

The switch to TeamHealth from ECI could mean that some emergency physicians will not be re-hired by TeamHealth. But TeamHealth officials said in a statement the company had a "strong track record" of retaining physicians.

"For example, we started service at Boone Hospital Center on Aug. 1. In that instance, we retained the entire group of physicians that was there," TeamHealth said in the statement.

TeamHealth provides physicians to staff various health care facilities in 46 states, and reported revenue of $2.4 billion in 2013, according to filings with the U.S. Securities and Exchange Commission.

Kitson said that BJC has been working with both contractors since May to ensure a smooth transition of services throughout August.

Hospital industry experts said that across the nation, health systems are taking a hard look at spending on purchased services, which includes contracting with third parties.

"There has been a focus on looking at purchased services as a broad category for opportunities to drive down costs and in some cases improve quality," said Nuruddin Virani, executive director of spend performance solutions for the Advisory Board Co.

In the past, hospitals administrators allowed specific departments to purchase certain services from contractors. But now, as health systems face increased financial pressure, hospital administrators are beginning to look at purchased services as a whole and centralizing that function, Virani said.

BJC HealthCare has faced increasing financial pressure as it experiences declining reimbursement from providers, including federal and state governments.

In June of last year, BJC laid off 160 employees, the first-ever systemwide layoffs in the health system's 20-year history.

BJC also dropped part-time workers from its health insurance coverage and added a $100 surcharge onto premiums for spouses who had the option to receive coverage elsewhere. Smokers who do not enroll in a cessation program also are required to pay more for health coverage starting in 2015.

And at the beginning of this year, BJC reduced the pool of patients eligible to receive financial assistance, or what is known as charity care, and introduced new co-pays for uninsured patients.

The $4 billion health system has also consolidated various services among its 13 hospitals throughout Missouri and Illinois. BJC is led by CEO Steve Lipstein.

Samantha Liss is a business reporter at the Post-Dispatch. Follow her on Twitter @samanthann and the business section @postdispatchbiz.

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