Sutter Health pursues launch of own HMO

Sutter Health, which operates a number of North Bay hospitals and other care services, has filed plans with the state to launch its own health maintenance organization by 2014 and aims to offer a commercial health plan to employer groups.Health Care TrendsSept. 24, 2012Providers anticipate Western Health arrivalSutter Health pursues launch of own HMOHealth care column

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"Offering a health plan enables us to partner directly with patients to manage their total health needs, including their ongoing care experience and the total quality and cost of their care," said Pat Fry, president and chief executive officer of the Sacramento-based nonprofit health system.

On Sept. 14, Sutter submitted an application with the California Department of Managed Health Care for a Knox-Keene license. Should Sutter obtain approval, it would first offer the plan in the Sacramento region.

"We expect to debut our new plan products in the greater valley areas and move into other parts of our Northern California service area sometime later," Sutter senior spokesman Bill Gleeson said.

In the North Bay, Sutter operates hospitals and outpatients facilities and offers home care in Marin, Sonoma, Lake and Solano counties.

Mr. Fry said Sutter's HMO would help employers provide better care for their workers.

"The Knox-Keene license filing represents our first formal step toward delivering the type of high-value health plan products that consumers and employers want and expect," Mr. Fry said in announcing the initiative. "Our proposed Sutter-sponsored health plan will be locally run and will provide superb service and the great quality we're known for, along with competitive rates."

It wouldn't be the first time that Sutter Health has run an HMO. It operated Omni Health Plan in the mid- to late-1990s then sold it to Blue Shield.

Much has changed across the health care landscape since then. The establishment of an HMO reflects vast changes under way spurred by health care reform, particularly accountable care organizations that pair hospitals with physician networks and insurance products.

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