HACKENSACK, SUMMIT SET TO PARTNER

NJBIZ EXCLUSIVE: INDUSTRY GIANTS INK MANAGEMENT DEAL

Plan is to create the state's largest physician group

Hackensack University Health Network and Summit Health Management have entered into a unique partnership that will lead to the creation of the largest physician group in the state, one that has the potential to dramatically change how health care is delivered, the leaders of both organizations told NJBIZ in an exclusive interview.

The partnership calls for Summit Health Management, the management organization that runs Summit Medical Group, to coordinate and improve how Hackensack's burgeoning physician group delivers care.

The final details are still being worked out, but under the initial agreement, there are plans to create a new company that will run a physician group that will start with about 100 providers (50 from each side) but could quickly grow to a statewide network of more than 1,500 providers.

The company would be owned by Hackensack University Health Network, but run by Summit Health Management, the leaders of both groups said. A formal announcement is expected soon.

"This is huge; there's nothing like it," said Robert C. Garrett, CEO and president of Hackensack University Health Network. "It's a sensible partnership, but it's one that hasn't happened before so we're breaking new ground here. It just makes so much sense."

Jeff LeBenger, the chief executive of both Summit Health Management and Summit Medical Group, said the groups are a perfect match.

"Hackensack is such a forwardthinking organization," he said. "It is one of the few systems that we have seen across the country that is looking to create a network of providers to integrate care within their system. That's why we are so excited."

Hackensack will pay Summit a management fee in the partnership; terms are still being negotiated.

Here are the first steps of the partnership, which was forged with a signed letter of intent earlier this month:

* Officials from Summit Health Management already have started observing the practices of doctors in Hackensack's physicians group, which has about 600 doctors and practitioners.

* The observations are expected to last for roughly four months and will conclude with a report that includes actionable items to improve the coordination of care and provide care more economically.

* The potential new company would start with a group of about 100 providers, a number small enough number to enable enhanced integration without any disruption of services. The hope is that it will be a model for a rollout for the entire network.

LeBenger said his group's expertise will benefit the people who need it most: the patients.

"When you create a provider network, you are creating a care management system that will navigate that patient through the health care experience much better," he said. "The sickest 5 percent of the patients take up 30 percent of health care spending. So when you can navigate and care-manage that patient really well and at a lower cost point, moving more toward an ambulatory sector, you can really improve the quality of care of that patient while lowering the cost."

Garrett, a well-regarded leader and innovator who earned the top spot on the NJBIZ Power 50 Health Care list in March, welcomes the chance to work with Summit Health Management on what is a growing part of the Hackensack system.

Hackensack, which had revenues of more than $2 billion in 2014, has seen its physician group double in size the past five years. Garrett said he recognized his system could benefit by working with Berkeley Heights-based Summit.

"That's what partnerships are about," he said. "It's getting better. It's learning from others.

"We do some things great, and there are some things that we do very well but we could do better. I'm very impressed with what Summit has been able to do in terms of practice management. They really have the tools and the know-how and the resources to be able to take our medical group into the future and actually make it work better than it actually has, producing better quality outcomes providing more efficient care."

And eventually doing so with a network that has enormous scale.

In addition to Hackensack's 600 providers, there are more than 500 at Summit Medical Group. And Hackensack is in the process of merging with Meridian Health, a partnership that could bring another 400 providers into the fold.

When you consider the number of doctors looking to join groups every week and who will be looking to join Hackensack as it moves closer to the opening of its private medical school - not to mention future alliances or acquisitions Hackensack could make - the numbers are staggering.

Despite the numbers, neither Garrett nor LeBenger sees any antitrust issues.

The two groups have some overlap in Essex County, but little elsewhere with Hackensack having a stronger presence in Bergen and Hudson counties and Summit concentrated more in Union and Morris counties. The Meridian merger will bring in the Shore area, where Summit does not have any facilities.

"We will not be more than 10 percent in any ZIP code or market because so many other hospital systems are here, as are all the other physicians groups," LeBenger said.

Garrett feels their combined number of physicians over such a vast area will make a difference.

"You have the ability, with that many providers, to really make an impact in a positive way on outcomes in the health care system," he said.

LeBenger, whose Summit Medical Group is widely acknowledged to have been ahead of the health care reform curve and who earned the No. 7 spot on the NJBIZ power list, agreed.

"Just imagine having a group with up to 2,000 doctors under the same integrated health network working seamlessly - or two systems really working together," he said. "That is we found with Summit Medical Group. When you really have an integrated model, you see all the data and you have so many more efficiencies and no duplication of testing."

LeBenger, who is still a practicing doctor, said the fact that his organizations are physician-owned and physician-run gives them more credibility with other doctors - enabling his groups to produce better results with less skepticism or distrust.

The proof, he said, is in the success of Summit Medical Group.

"We've proven we can produce better health quality metrics at a better cost," he said. "That's where this can really go."

Garrett is eager to see it play out.

"This is big; this is huge and exciting," he said. "When people stop to think about it, they are going to say, 'Wow.' This changes the landscape."

E-mail to: [email protected]