Six weeks after UW Health started building a clinic in September on the northwest corner of highways 51 and 19 in DeForest, Meriter Health Services broke ground on a clinic on the intersection's southeast corner.
Three weeks after UW Health began putting up a clinic in October on the south side of East Broadway in Monona, Meriter was clearing ground for a clinic across the street.
Meriter and UW Health, longtime collaborators on services such as maternity care, are competing like never before. It's not just a battle over clinics. Meriter is hiring dozens of doctors - including some, such as pediatricians, who vie with UW Health doctors for patients the systems used to share.
The developments are "not in the community's best interest," a UW Health administrator has said. The moves could drive up health care costs, a business leader says.
But Jim Woodward, Meriter's chief executive officer, said he's preparing Meriter for changes - many stemming from the new federal health care law - that require a more "integrated" approach to medical services.
A hospital needs to have its own doctors, clinics and insurance plan today, he said. Meriter, which has mostly relied on UW Health doctors for years, is doubling the size of its Meriter Medical Group to 150 doctors and may build a few clinics in addition to those under construction, he said.
The migration away from UW Health will help ensure Meriter's vitality as reimbursements from insurers change in coming years, Woodward said.
Insurance payments increasingly will be based on keeping patients healthy and out of hospitals, and on each health system's quality of care, Woodward said. To prepare for the shift, he said, Meriter needs more clinics and doctors who share the financial risk with the hospital and its insurance plan, Physicians Plus.
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"It's a matter of making sure we have control over our future, rather than someone else," Woodward said. "We're doing what we believe is right for Meriter, the community and our community mission."
Meriter and UW Health recently signed an agreement to continue sharing maternity care through 2023, a sign that the competition hasn't become an all-out war, Woodward said. Meriter will keep delivering babies and UW Hospital won't start doing so.
"There will be areas where we will compete," Woodward said, "and opportunities where we continue to collaborate."
Dr. Jeff Grossman, president of the UW Medical Foundation, UW Health's doctor group, last fall criticized Meriter's plan to add clinics and doctors. He said it was "unfortunate" and "not in the community's best interest" and will drive up health care costs. This month, he said he didn't want to comment further.
Cheryl DeMars, chief executive officer of The Alliance, a Madison-based group of 160 employers that collectively purchase health care, said health care is unlike most sectors of the economy because more supply can create more demand if doctors provide more care than necessary to help recoup clinic construction costs. Having Meriter and UW Health build clinics next to each other in DeForest and Monona might encourage this, she said.
"The cost gets passed on to employers and consumers," she said.
Meriter's DeForest clinic will cost $6.5 million and its Monona clinic $15 million. UW Health's DeForest clinic will cost $4.3 million and its Monona clinic $10 million.
Woodward said competition lowers cost, even in health care. "You cannot have enough primary care," he said.
Meriter's decision to build clinics next to the UW Health sites "was happenstance," Woodward said. Each organization sought high visibility and easy access, he said.
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