The Community Snapshots Project

Capturing Health System Change

Columbia, S.C.
1995

Overview

ong accustomed to their roles, players in the Columbia, South Carolina, health care market now face challenges from outside ideas, outside concepts, and outside players. Market participants have heard and read about national changes in the way health care services are financed and delivered. They do not welcome such change coming to their market from beyond its borders, and they do not want such change to alter their long-practiced and long-held market roles. In an effort to keep up with health system reform, while preventing such reform from being forced upon them by outsiders, players in the Columbia market are taking tentative steps toward health system integration and managed care. The new activity in the Columbia market is being generated by players acting independently of one another, with little alignment across health care sectors and no leadership from the public sector or the community. Hospitals are developing alliances with one another in an effort to increase market power through an appearance of collaboration while protecting and promoting each facility individual identity. Physicians are joining provider networks to protect and expand their client base, but they are not prepared for the changes that participating in a managed care environment might bring to their practice patterns. In an effort to capture market share, insurers and health plans are developing managed care products that look like indemnity insurance. Acting independently, these sectors are on the verge of coming together to create integrated delivery systems, but they are not quite there. What they have achieved thus far is an appearance of system integration that they hope will discourage bearers of health system reform from approaching the area. Each sector is also counting on the new system to protect its long-held market share and deep-rooted market role.

The Columbia market comprises four counties in central South Carolina: Richland, Lexington, Newberry, and Fairfield. This area of the state is referred to as the Midlands. About 15 percent of South Carolina.6 million people (1994 base year) reside in the Midlands, and nearly 20 percent of Midlands residents live in the city of Columbia in Richland County. Columbia was established in 1786 as one of the first planned communities in the country.

The Columbia market is dominated by four large hospitals with a history of religious and social missions that have guided the health care services they provide, the way they provide them, and their financing and governance structure. Each hospital employs its mission as a way to define its role in the community and to maintain that role. As the hospitals have shifted their focus from patient needs (as expressed by their missions) to financial success, anxiety, strain, and mistrust have emerged within the provider community. At the same time, insurers and health plans are trying to expand their managed care business independent of the hospital activity, neither leading the market nor following the hospitals ad. Together, Columbia hospitals, physicians, insurers, and health plans have created a new environment of risk taking, and there is great uncertainty where this environment might take them.