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Kettering Health Network acquires stake in physician-owned hospital

Registered Nurse Gloria Buckingham works at the nurse's station of the Medical Center at Elizabeth Place on Wednesday, May 27. Kettering Health Network is acquiring a 50 percent stake in the hospital, which has a new contract with Anthem Blue Cross and Blue Shield.

Staff photo by Jim Witmer Registered Nurse Gloria Buckingham works at the nurse's station of the Medical Center at Elizabeth Place on Wednesday, May 27. Kettering Health Network is acquiring a 50 percent stake in the hospital, which has a new contract with Anthem Blue Cross and Blue Shield.

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By Ben Sutherly, Staff Writer Updated 11:45 PM Wednesday, May 27, 2009

DAYTON — Kettering Health Network has acquired a 50 percent stake in the Medical Center at Elizabeth Place for an undisclosed sum, MCEP and KHN officials said on Wednesday, May 27.

MCEP CEO Alex Rintoul said the hospital and KHN didn’t publicize the deal when it was reached in January, in part because MCEP was negotiating a recently finalized contract with Anthem Blue Cross and Blue Shield.

Anthem said Tuesday that MCEP and its related physician groups began participating in Anthem’s traditional, all managed care and “Senior Advantage” networks on May 10.

Rintoul and KHN President Fred Manchur declined to disclose terms of the KHN-MCEP deal. Manchur called the sum paid by KHN “modest.”

As part of the deal, KHN holds two seats on MCEP’s board of directors. Those two seats are held by Manchur and Pete King, vice president for finance and operations at KHN’s Grandview Medical Center.

Daily management of MCEP remains with Rintoul and his management team, Rintoul said. Despite KHN’s ownership stake, he said, physicians maintain a strong say in how the hospital is run.

“We retain our physician-driven, patient-focused motto,” Rintoul said.

MCEP’s $13.5 million in revenues fell short of the hospital’s $20 million goal in 2008. MCEP approached KHN about buying an ownership stake in mid-2008, Manchur said.

KHN decided to enter into its first affiliation with a for-profit hospital after seeing physicians and payers would be supportive, Manchur said.

The Anthem contract, meanwhile, should mean a 35 percent increase in MCEP’s patient volumes, and the creation of 10 to 25 full-time equivalents, Rintoul said. MCEP does not plan to add to its 26 beds.

MCEP sees about 200 patients monthly through surgeries, 450 patients through imaging services, and has about 40 patients admitted monthly for medical and other ancillary services, Rintoul said.

While Anthem patients will pay less out of pocket for medical services at MCEP, Anthem still reimburses MCEP less than it reimburses other local hospitals, Rintoul claimed.

“I don’t have first-hand knowledge of what Anthem is paying Premier (Health Partners), but I’m confident it’s a good bit more than what they’re paying us,” Rintoul said.

An Anthem spokeswoman said the insurance company doesn’t disclose specifics of its financial arrangements.

MCEP is housed inside the former Franciscan Medical Center at One Elizabeth Place, off Edwin C. Moses Boulevard.

Contact this reporter at (937) 225-7457 or bsutherly@DaytonDailyNews.com.

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