Executives of two national trade organizations for physician group practices last week said they've rejected merger plans in favor of a less formal collaboration.
Both the Englewood, Colo.-based Medical Group Management Association and the Alexandria, Va.-based American Group Practice Association said the joint working group established late last year to explore merging the groups recommended against completing the combination. Instead, the panel backed forming a "group practice coalition" that could include sharing legislative lobbying, continuing education and library resources.
Members of the joint working group were scheduled to bring the recommendations before the boards of their respective organizations for approval, beginning with MGMA on April 20 and at AGPA later this week, April 28 and 29.
A full merger would have brought together the lobbying force and medical prestige of the AGPA's membership, which consists largely of academic medical group powerhouses, with the group-practice consulting and formation expertise of the MGMA.
Last month, the working group signed a non-binding letter of intent designed "to continue working toward a proposed merger" while sharing information to evaluate the intended combination. The merger proposal was made public earlier this year (Jan. 31, p. 4).
Top executives of both groups said that the working group members had reached an impasse in recent weeks over the issue of governance.
Frederick J. "Fritz" Wenzel, who last week was named by MGMA as its full-time executive director and chief executive officer, said MGMA members "couldn't come to closure" on that issue.
Members of each group had specific ideas about the composition of the board that ultimately would govern the new organization that emerged from the consolidation. They disagreed about the precise number of members who would represent each organization on the board, said Mr. Wenzel and Donald W. Fisher, AGPA's executive vice president and chief executive officer.
Messrs. Wenzel and Fisher said they expect the memberships of their organizations to find other ways to collaborate while remaining independent organizations.
AGPA's Mr. Fisher said the merger talks have allowed both groups to familiarize themselves with their respective goals and to identify goals that they could pursue jointly. "What we have is an amicable relationship which will only get better as we begin working on various projects," he said.
MGMA's membership consists of 5,900 group practices with 14,400 administrators/managers and 112,000 physicians. AGPA has 250 group practices with a total of 27,000 administrators/managers and physicians.
In other developments, MGMA last week said that Mr. Wenzel, who had been serving as interim executive director and chief executive officer, has agreed to remain in the executive slot under a two-year contract beginning Oct. 15.
He assumed the temporary duties as MGMA's top executive after the resignation last fall of longtime CEO Richard Grant (Oct. 11, 1993,p. 14).
Mr. Wenzel, 63, who is an adviser to the Marshfield (Wis.) Clinic, is scheduled to depart from that job in mid-October. However, he will continue in his advisory role to the president of Marshfield as an independent consultant on select assignments in addition to his MGMA duties, Mr. Wenzel said.