The merger of the Hitchcock and Lahey clinics into the third-largest non-prepaid medical group in the nation reflects a trend toward larger multispecialty groups. But mainly, it's notable for the prestige and size of the dealmakers.
"I can't really remember a merger of two large, pre-eminent groups like this," said Don Fisher, M.D., executive vice president and chief executive officer of the American Group Practice Association, which represents physicians in 250 group practices.
Large groups acquire smaller ones almost daily, so trade associations can't keep track.
Dr. Fisher speculated that the governance and management issues have complicated previous merger attempts between large groups. "I'm not sure this single merger will spark a merger mania, so to speak, but I think we'll see large mergers in the more mature markets," he said.
Employers and health plans want to simplify administration and lower costs by contracting with a few groups that can provide comprehensive care to large populations. In response, multispecialty groups are forming and merging.
According to the American Medical Association's group practice survey, the average size of multispecialty groups grew from 15.2 physicians in 1980 to 24.6 in 1991, while the number of physicians in multispecialty groups grew from 54,122 to 86,819.
Other motives to merge include limited capital and personnel with skills to develop information and management systems for large groups, said Joseph Mitlyng, president of the Medical Group Management Association.