Birth of an alliance.

In December, an alliance of 11 not-for-profit retirement communities and senior service organizations in the Cincinnati and Dayton, Ohio areas was incorporated as a geriatric health care network called Momentum Health Solutions. The impetus: members' interest in positioning their respective organizations for success in the managed care environment.

Together, the 11 member organizations operate 15 retirement communities, nursing homes and community-based services, and serve more than 8,000 older adults. Assets collectively total more than $750 million.

The alliance is structured as a not-for-profit corporation that will serve as the parent corporation for all Momentum activities. Each member is an equal partner and has a representative on the Board of Trustees.

While not-for-profit status is a requirement for membership in our parent corporation, we may, at some point, have subsidiaries in which there are opportunities for for-profit partners.

We expect collaboration to occur at a variety of levels. We'll be pursuing a number of group purchasing strategies and joint business opportunities in which we're able to leverage the collective strength of the group to reduce operating costs and improve financial performance.

We also plan to use collaboration as a means to improve the quality of our programming and to strengthen the services we offer to our residents. We see this happening in a number of ways, such as through the development of standardized medical and care management practices. We expect that these management systems will produce improved quality outcomes that will help us to compete in the managed care environment. We're also planning to conduct benchmarking to compare and ultimately apply best practices within the system.

One of our top priorities is to engage in managed care funding in a way that permits us to uphold the quality standards of our organizations. We plan to gain the necessary autonomy to do this by entering into full-risk Medicare/ Medicaid managed care contracts. It will be our responsibility to control the funding and take the steps necessary to develop a high-quality geriatric health care network. This will include the management systems and clinical/care management practices necessary to ensure cost-effectiveness.

To achieve our financial and quality objectives, we envision a medical management system led by a geriatrician and supported by a Physician Advisory Board. In addition, nurse practitioners will provide on-site case management services to residents of member facilities and communities.

The application of automated clinical management systems will be critical to the success of our venture in ensuring standardized and cost-effective health care practices. Avoidance of unnecessary hospitalization will be essential to ensuring the financial viability of the plan and is expected to be achieved through the use of members' subacute, home health care and other long-term care programs.

As a secondary managed care strategy, Momentum will pursue provider service contracts with managed care organizations. To ensure Momentum's success in negotiating effective contracts, the alliance retains the right to contract exclusively on behalf of Momentum's members. Momentum's Board of Trustees retains the decision-making authority to designate which plans will fall within Momentum's exclusive domain to pursue contracts.

Forming the Alliance

Momentum Health Solutions was two years in the making, beginning with business planning and regional market studies conducted early on. Fortunately, because of the increasing number of models to emulate, the logistics of setting up alliances such as ours are getting a bit easier. The forerunners for long-term care alliances are the hospital joint ventures that have been forming in a number of markets, including several acute care alliances in the Dayton and Cincinnati markets.

One of the strengths of our group is that we've built on prior relationships that were developed in the not-for-profit sector over the years. Collaboration is not new to the members of Momentum. Examples include the sharing of clinical outcome and resident satisfaction results, the forming of partnerships for the delivery of home health services, and contracts among members for laundry services.

Formation of the alliance was also facilitated through the work of our state association. In essence, we brought together a group of individuals who, from the start, had a fairly high level of trust and a strong working relationship. This has turned out to be a critical element in putting together a collaborative venture in which members are willing to take risk, and to do so openly in an environment in which the collective decision of the group is upheld. Also critical is the compatibility of the group with respect to shared values and mission.

Still, getting 11 CEOs to reach agreement has not been without its challenges. I believe a critical factor in the success of our group has been the use of professional facilitators - professionals with experience in alliance formation. A sound piece of advice we received early in our deliberations was the importance of each of us "checking our egos at the door," and focusing on strategy and high-level policy.

As managed care moves in the direction of statewide or multi-state coverage, we'll also be collaborating on ways to provide a larger geographic network. Right now, the market is still shaking out. There are a number of regional MCOs, but there is certainly a growing number with interest in statewide networks.

Statewide collaboration with other alliances is a distinct possibility, especially since several multifacility Momentum members have operations in other regions of the state and are already participating in a Cleveland-based alliance and one in the process of forming in Columbus. Our members, therefore, already have a self-interest in aligning with other groups around the state in whatever way makes the most economic sense - to pursue still larger group purchasing opportunities or develop related business ventures on a larger scale.

All in all, there's much to be gained from not-for-profits collaborating in this fashion. Most of our members have a long history of service to their respective communities and to their sponsoring organizations, and we believe this kind of collaboration will strengthen their ability to continue that service.

Doug Spitler is CEO of Episcopal Retirement Homes and Chairman of Momentum Health Solutions, Cincinnati, OH. For more information, call Momentum Health Solutions at 513-271-9049.