Two of Ventura County's largest hospitals will join medical centers in Santa Barbara and the San Fernando Valley to create a regional health-care network that will increase patients' choices, hospital officials said.
Los Robles Regional Medical Center in Thousand Oaks, St. John's Regional Medical Center in Oxnard, Pleasant Valley Hospital in Camarillo, Cottage Hospital in Santa Barbara and West Hills Regional Medical Center in West Hills are planning an alliance that will allow them to negotiate together with insurance companies, officials said.
Jill Donahue, director of marketing for Los Robles and West Hills, said the network will make the hospitals more attractive to patients and insurers.
"They'll cover a greater area," she said. "It'll give the patients more choices."
For instance, people who work in Thousand Oaks but live in Camarillo may now be encouraged to go to a Thousand Oaks hospital under their insurance plan, Donahue said. But the alliance will make it easier for such commuters to visit hospitals near their homes.
Some details of the arrangement are still under discussion, but Donahue said the hospitals, which will remain under separate ownership, have reached "a gentleman's agreement." Spokeswomen from Cottage and from the Mercy system, which includes St. John's and Pleasant Valley, also confirmed the deal this week.
Donahue said no money would change hands among the medical centers, but representatives of all the hospitals would serve on a committee to negotiate contracts with insurance companies. She said the alliance could eventually lead to closer cooperation among the hospitals in a variety of areas. David Langness, a spokesman for the Health Care Assn. of Southern California, said that is what usually occurs after an insurance-contracting network is formed.
"It's like living together before getting married," he said.
Langness said pressure from insurers is driving hospitals into each other's arms across Southern California.
"In order to survive, hospitals have to be networked in Southern California," Langness said. "There's almost no such thing in Southern California as a stand-alone health-care provider."
The pressure to find a partner can leave some spurned suitors feeling jilted. And Michael Bakst, executive director of Community Memorial Hospital in Ventura, said news of St. John's new alliance leaves him wondering what is going on.
"After talking to me about cooperative ventures as recently as this morning, it would seem to me ill-advised and ill-timed to announce a joint venture that does not include us," Bakst said.
Bakst said, however, that he does not believe the new alliance will have any effect on his hospital, because the degree to which alliance members can cooperate is limited.
Daniel Herlinger, administrator at St. John's, said his discussion Friday with Bakst centered on a different sort of cooperative effort. "Michael knew about this other thing weeks ago," he said.
Langness said compared to mergers, alliances allow hospitals to maintain some local autonomy while still giving them increased negotiating clout with insurers.
Steve Valentine, a health-care consultant familiar with the local market, said such networks are constrained by antitrust regulations. For instance, they cannot share price information or threaten to boycott a health insurer to gain an advantage.
"You don't get a lot of leverage," he said.
But he said the alliance should be taken seriously. "It's a network of strong players that covers a lot of turf," Valentine said.
Playing a crucial role in the network will be Ronald C. Phelps, who started work last week as the chief executive officer of Los Robles. Los Robles' parent company, Columbia/HCA, is the largest health-care company in the country, and it recently announced plans to acquire Westlake Medical Center at the county line in Westlake Village.
Phelps said Columbia/HCA definitely wants to expand up the coast. And while Cottage and Mercy officials say they are not selling, Columbia/HCA is buying up hospitals nationwide at the rate of about one a week.
In eastern Ventura County, Phelps said, he is looking forward to using Los Robles and possibly Westlake as bases for launching a new array of "soft programs," such as skilled nursing, rehabilitation and home health care.
As chief executive officer of Brotman Medical Center in Culver City, Phelps started similar programs to boost revenue.