Atlanta, Georgia has a very diverse work force, consisting of men and women of various ages, ethnic groups, skills, and education. Many people live and work in one of approximately 14 counties that make up the Atlanta region. It is not uncommon for an employee to drive close to 100 miles one way to get to work. The employer base is diverse as well, consisting of large and small employers that range from entrepreneurs; healthcare services; local, state, and federal government offices; information technology; higher education; landscaping; personal services; banking; and the fast-food industry. Now that we have some background information let's learn more about the ABC Insurance Company located in Atlanta.
The ABC Insurance Company has been very aggressive and quite successful in recruiting companies, organizations, and individuals to join its managed care plans. Their ranges of services and rates have been extremely competitive. Their employer base is spread out among the 14 counties, which has been attractive to many employers. The ABC Insurance Company has been quite successful in selling its managed care insurance program to employers and organizations, so what is the issue?
Verde Greene Hospital has an excellent reputation for quality in maternity care, cardiac rehabilitation, and orthopedic medicine, and it is the only hospital in town to have received the Magnet Award for Excellence in Nursing. A sizable number of employer groups as well as employees, who have insurance coverage with ABC Insurance Company, want Verde Greene Hospital to be included in the network as a participating hospital.
When ABC insurance company approached Verde Greene Hospital to recruit it as a participating provider in their managed care plan, Verde Greene Hospital was very delighted to be asked. In fact, the hospital’s overall response was quite positive. However, there was one contractual stipulation that Verde Greene Hospital needed prior to signing any contracts and becoming a participating provider. Specifically, Verde Greene wanted to be the exclusive provider of maternity and cardiac care for all the patients in the ABC Insurance Company network: no exclusivity, no deal.

Because so many employers had pressured ABC Insurance Company to contract with Verde Greene Hospital, the insurance company agreed to the stipulations and agreed to enroll Verde Greene as a participating provider of care and an exclusive provider of cardiac and maternity services. This contract is legally binding for both parties, and they are scheduled to sign this contract in10 days.
It appears that the exclusivity clause in the contract may have created several unanticipated problems, which are listed below.
It means that patients who needs cardiac or maternity care may need to drive 50 miles and pass four or five other good hospitals in the plan network in order to get the care they need at Verde Greene Hospital.
A number of obstetrics and gynecology physicians, as well as cardiologists, who reside in one of the 14 counties do not have privileges at Verde Greene Hospital and have threaten to disenroll from the plan if Verde Greene Hospital is the only hospital contracted to see their patients. Even if these physicians are given hospital privileges, this would mean more staff meetings and Emergency Department duty at a hospital that is too far away. The existing staff physicians at Verde Greene Hospital object to the loss of available hospital space and time, as well as to the possibility of losing existing patients to the new physicians. These physicians also threaten to disenroll from the plan.
The other hospitals in the managed care plan object to the loss of patients and have threatened to disenroll from the plan as well and have threatened to sue for restraint of trade.

Your Assignment
a. What should ABC Insurance Company do? Why? How?
b. What should Verde Greene Hospital do? Why? How?
c. What should the employers do? Why? How?
d. What should the patients do? Why? How?

  • CreatedAugust 05, 2013
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