Premier hospital alliance has quietly kicked off its physician practice management business and has acquired a 25% interest in a group practice owned by a Georgia shareholder, MODERN HEALTHCARE*has learned.
Premier recently signed an agreement with Georgia Baptist Health Care System in Atlanta to manage the system's physician practices.
In a separate but related deal, Georgia Baptist has acquired the assets of 40-physician Atlanta Medical Clinic for an unspecified amount, said David Harrell, Georgia Baptist's president and chief executive officer.
Georgia Baptist also plans to create a taxable physician management company-called Premier Atlanta-that will operate Atlanta Medical and Georgia Baptist's 60 employed physicians in two regional service organizations, Harrell said.
Premier executives declined to comment on its physician practice management subsidiary and its equity relationship with Georgia Baptist.
But Harrell said: "We are working with Premier Practice Management Co. to establish regional service organizations that will help us expand access, reduce costs and improve our managed-care contracting. Ours will be Premier's first RSO nationally."
Premier Atlanta will compete with for-profit physician management companies such as MedPartners, said Walton Reeves, M.D., Atlanta Medical's chairman.
Birmingham, Ala.-based MedPartners/Mullikin acquired North-brook, Ill.-based Caremark International in early September to form MedPartners, the country's largest physician practice management company (Sept. 9, p. 4). Geogia Baptist acquired Atlanta Medical from Caremark after its merger with MedPartners, Reeves said.
Earlier this year, Robert O'Leary, Premier's chairman and CEO, said the 1,800-member hospital alliance will provide capital to help shareholders acquire and manage physician practices.
He said Premier's own practice management subsidiary would become a for-profit company and would be publicly traded in three to five years.
But Harrell said Premier already is beginning to partner with Premier shareholders in other parts of the country. He couldn't name the other systems partnering with Premier.
In Atlanta, Premier has purchased a 25% share of Georgia Baptist's southern RSO, which comprises the system's 60 employed physicians, Harrell said. Georgia Baptist owns 100% of Atlanta Medical, its northern RSO, he said.
"As our equity relationship unfolds with Premier, it is highly likely we will roll both RSOs into one corporation," Harrell said. "We will have a seamless company that will help us align physicians with our health system."
"The benefit of having Premier is that it can negotiate contracts with any hospital in town, not just with Georgia Baptist," Reeves said. "We prefer doing business with Georgia Baptist, but we will go with the contract that is most financially viable.
"We see teaming up with a local company (Georgia Baptist) rather than with Caremark as a plus because we are teaming with somebody knowledgeable in the Atlanta area," he said.
During the first year, Premier Atlanta will contribute about $4 million toward opening several new clinics in the northwest and northeast Atlanta areas, Reeves said. Atlanta Medical operates three clinics in northern Atlanta.
"We are gaining a capital partner (Georgia Baptist and Premier) that can help us expand geographically," Reeves said.