Swedish eyes integration with First Choice PPO. (Swedish Medical Center; First Choice Health Network Inc.; preferred provider organization)

Swedish Medical Center, hoping to preserve a competitive position under healthcare reform, is considering a link with First Choice Health Network Inc.

The five-hospital Washington Health Care Alliance, of which Swedish is a member, has signed a non-binding letter of intent with First Choice to work toward integrating operations.

Swedish chairman Gary Larson said that with the financial backing of the alliance, First Choice may convert into the kind of health insurer envisioned by the 1993 Health Services Act, which will radically transform the state's health system beginning next year.

Seattle-based First Choice now is a preferred provider organization (PPO) owned by eight hospitals, including four that belong to the alliance. As a PPO, it discounts its prices to draw patients to its network of some 60 hospitals and 4,000 physicians statewide.

Unless they become part of a health system that includes the …