Nashville-based healthcare titans PhyCor and Columbia/HCA Healthcare Corp. could soon be next-door neighbors in Pensacola, Fla.
PhyCor recently signed a letter of intent to affiliate with West Florida Medical Center Clinic in Pensacola, the largest physician group in the Florida Panhandle region.
The 150-physician clinic is adjacent to 550-bed Columbia West Florida Regional Medical Center, and its doctors constitute more than 90% of the hospital's staff.
PhyCor could enhance the clinic's market clout by providing capital and management expertise. Specifically, the clinic wants PhyCor to help it recruit physicians to expand its primary-care component to 50% of staff from the current 30%. The clinic also hopes PhyCor can bring information systems and managed-care expertise, clinic Administrator James Stolhanske said.
The clinic, founded in 1938, already has 13 primary-care offices and two dialysis units, and PhyCor could provide the capital to expand those facilities.
If a deal is signed, PhyCor would buy the clinic's assets, including its main facility adjacent to the hospital, and sign a long-term management agreement with the doctors.
The clinic has agreed to negotiate exclusively with PhyCor. A final agreement could come by early October. Any deal would have to be confirmed by a vote of the clinic's 125 shareholder physicians.
Stolhanske said the medical group considered proposals from Columbia as well as insurers and other physician practice management companies before deciding on PhyCor.
Despite Columbia's proposals not being accepted, Stolhanske said he expects the clinic's relationship with the hospital to remain intact. "We intend to work closely with Columbia and other hospitals we use," he said.
Steve Brandt, president and chief executive officer of Columbia West Florida Regional, declined to comment on the matter.
This wouldn't be the first time that PhyCor and Columbia have worked side by side.
PhyCor Chief Financial Officer John Crawford said the company manages doctors in 11 of Columbia's top 20 markets. He said there are at least five markets where PhyCor physicians are principal administrators at Columbia hospitals: Rome, Ga.; Wilmington, N.C.; Corsicana, Texas; Conroe, Texas; Roanoke, Va.; and Richmond, Va.
Crawford said he could not comment on the situation in Pensacola because a deal has not been completed but said both companies can benefit when PhyCor enters a market.
"Often Columbia will have competed with PhyCor in seeking an alliance with the physicians, but typically we'll start to work together to navigate change in the marketplace," Crawford said. "It doesn't necessarily have to be a win-lose scenario."
For example, he said, in Houston PhyCor is organizing independent practice associations that are contracting partners with Columbia hospitals.