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Suburban Health Organization Hospitals Have Long History of Working Together

Suburban Health Organization (SHO) is a physician and hospital network serving central Indiana since 1994.

It was developed by Suburban Hospitals, Inc., to address the assumption of financial risk in the new managed care market and the expected changes due to President Clinton’s proposed healthcare reform package. The hospitals also hoped that the network would allow them to maintain their independence and keep their local community focus.

Suburban Hospitals, Inc. was a coalition of 10 Indianapolis area hospitals started in 1986, to participate in group purchasing agreements and standardized agreements with payors. Separately the hospitals had little experience with health maintenance organizations and lacked the resources to assume the possible financial risk of absorbing the cost of care that exceeded the contracted payments. But together they could share the risk and participate in the growing managed care market.

Julie Carmichael, President and Chief Executive Officer, was hired in October, 1993 to shape the group’s long-term strategy and identify areas where the hospitals could share services and collaborate. Suburban Health Organization, Inc. officially incorporated December 1, 1994 as a taxable, not-for-profit corporation that could enter into managed care contacts on behalf of each member hospital.

They signed their first risk-based managed care contract with M•Plan with the contract taking effect on February 1, 1995.

In addition to managed care contracting, an early focus was on sharing recruiting efforts to help recruit physicians to the smaller communities served by SHO hospitals. Suburban Physician Recruitment was started in 1996 and has expanded to also recruit physician assistants, nurse practitioners and certified nurse anesthetists.

The original 10 members of Suburban Hospitals, Inc. included Clinton, Hancock, Hendricks, Henry, Johnson, Major, Morgan, Riverview, Westview, and Witham Hospitals.

While Suburban Hospitals, Inc. no longer exists, its legacy continues through Suburban Health Organization. Today seven of those hospitals remain as owners of Suburban Health: Hancock, Hendricks, Henry, Johnson, Major, Riverview, and Witham. A complete list of current owners includes:

Recognizing the need for an affiliation with an Indianapolis tertiary hospital, St. Vincent Health was invited to join SHO and became a member in 2002. Community Health Network joined as a second tertiary member in 2015.

While risk-based payor contracts played an important role in SHO’s early years, core competencies have expanded to focus on programs that help owners advance quality of care, pursue opportunities to improve efficiency and ensure that patients in their communities have access to SHO providers.