Mullikin Medical Centers will expand its service area across the Pacific coast, including Alaska and Hawaii, if the purchase of Portland, Ore.-based Pacific Medical Group goes according to plan.
Under a letter of intent signed by the parties, Pacific Medical would become Mullikin Northwest and would grow into a multistate physician alliance including Alaska, Hawaii, Idaho, Oregon and Washington state. The deal, Mullikin's first venture outside California, is expected to close in 60 days.
John Pietrzak, Mullikin's senior regional administrator, said Pacific Medical's 280 physicians will trade interest in their group for stock in Mullikin. The purchase amount was not disclosed.
Mullikin Northwest will be governed by a seven-member board appointed by Mullikin, with four members nominated by local physicians, Mr. Pietrzak said.
"It's always been Mullikin's intent to become a long-term provider of healthcare, and that means serving multiple states," Mr. Pietrzak said.
Gary Netzer, Pacific Medical Group's chief executive officer, said Mullikin had the capital Pacific Medical needed to expand and enlarge its bargaining clout. "Our strategic plan was to be the physician equity company of choice," he said. "We wanted to remain physician-driven. We didn't want to sell out to an insurance company or a hospital."
Mullikin is a for-profit, physician-owned, full-risk provider, comprising more than 400 primary-care and specialty physicians. Based in Long Beach, Calif., it has 54 offices and a 99-bed general acute-care hospital in Artesia, Calif. It contracts with 18 other hospitals and 22 HMOs with about 300,000 enrollees.
Mullikin has spent the past year forging alliances with medical entities in Northern California.
Pacific Medical Group has six offices in the Portland area with more than 80 primary-care physicians and 200 specialists. It covers more than 31,000 lives through managed-care contracts and owns management services in Vancouver, Wash.