A new contract between Preferred Health Systems and Galichia Heart Hospital signals a change in the way health care is delivered in Wichita.

As of last month, Galichia Heart Hospital is an in-network provider for people who have Preferred Health Systems insurance, the CEOs of both said Wednesday.

For the past 15 years or so, Preferred and Blue Cross and Blue Shield of Kansas, the two largest carriers in the area, have had exclusive hospital contracts -- Blue Cross with Wesley Medical Center and Preferred with the Via Christi Wichita Health Network. Via Christi Health System is the parent of Preferred Health and the Via Christi Wichita network.

The new contract gives people with Preferred Health insurance a choice between Galichia and Via Christi's hospitals. Galichia is a Via Christi competitor.

Marlon Dauner, Preferred's president and CEO, said the contract was a year in the making and the result of area employers asking for more choice as well as Galichia's interest in contracting with Preferred.

He said Preferred has been in conversations with other Wichita hospitals as well, though any other new contracts are months away.

Blue Cross spokesman Graham Bailey said his company also has talked with Galichia and other Wichita hospitals. "We have continuing conversations with all providers on a continuing basis," he said.

Dauner said the contract with Galichia "could result in a significant change in the market." "The question really becomes, what does it do to the cost of services? Typically, when you have an exclusive contract with a hospital, you're going to get a better rate because you're driving business to them," he said.

For Preferred, he said, "clearly it's different than other insurers. Other insurers would look at it solely from the perspective of what's in the best interest of the insurer. We look at it in terms of what's in the best interest of the entire (Via Christi) health system." Stephen Harris, president and CEO at Galichia Heart Hospital, said the contract "validates our business model. We're honored to be able to take care of Preferred Health patients." He said the hospital was "very, very open to discussing a contract with Blue Cross. Or anybody else, for that matter. I really believe the market should be open and patients should be able to choose what facility and physicians are best for them... and I think that's where the market is headed." Blue Cross' Bailey said, "A lot of our network depends on what our customers want." The carrier also wants to protect the hospitals in its network, he said.

"Any changes that we make, if we make any," will be for years beyond 2009, he said.

Preferred's Dauner said employers were interested in giving their employees more choice and in saving money.

But "you still have to negotiate contracts, and if you can't come to agreement on contractual language, or you can't come to agreement on payment amounts... you may never come to agreement.

Reach Karen Shideler at 316-268-6674 or kshideler@wichitaeagle.com.

WICHITA, Apr 09, 2009 (The Wichita Eagle - McClatchy-Tribune Information Services via COMTEX)