Covenant Management Systems is Established by ARC and Seton

It's the $64,000 question of managed care: How do we provide quality health care amidst all these administrative hassles and paperwork?

Austin Regional Clinic and Seton Healthcare Network believe they've found the answer.

The two health care organizations have formed a jointly owned service organization called Covenant Management Systems to take some of the administrative duties out of doctors' hands.

"We know that consumers and health professionals alike want to concentrate on their care relationship without worrying about paperwork or health care plan rules. This new organization will allow the physician groups it manages to do just that," says Seton CEO and President Charles Barnett.

Both ARC and Seton will remain independent organizations, but the two will contribute resources -- including a staff of approximately 500 -- to the endeavor. Details of the partnership were not disclosed, but Covenant CEO and President Dr. Norman Chenven says the two groups are equal partners, splitting everything 50-50. Seton and ARC officials also will have a place on Covenant's board of directors.

Chenven, CEO and president of ARC since its formation in 1980, agreed to lead Covenant when it began operations at the first of the year.

Hans Haydon, a local internal medicine physician at ARC's Far West Boulevard location, was elected by group shareholders on Jan. 12 to replace him.

More than 500 Covenant employees will work within the ARC and Seton buildings, but patients and doctors will probably not interact directly with any of them, officials say.

"Covenant should be absolutely invisible to the patient, but we certainly hope they notice that things are more efficient," Chenven says.

Those involved in the partnership say it's good business sense for ARC and Seton to forge ahead together. This type of partnership, they add, is unlike anything else in Austin, but similar efforts have been made in other parts of the country.

While Covenant will provide several services to ARC and Seton, the purpose of the new venture is to:

  • Provide an environment sensitive to patients' needs;
  • Remove external distractions from the physician/patient relationship; and
  • Assist physicians in managing the complexities of practicing medicine in today's regulatory and payment environment.

The new organization initially will provide support to physician groups currently managed by ARC and Seton. But Covenant's services, such as keeping up with regulations and dealing with insurance companies, will likely be offered to other physician organizations and independent physician groups in Texas at some point, company officials say.

"We're not going to aggressively go out and try to market these services," Chenven says. "We're going to start slowly and develop these services, and as they're proven and the infrastructure is developed, we'll offer it to others."


Published in the Austin Business Journal

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