West Palm Beach, Fla.-based PhyMatrix completed its acquisition of U.S. Management Systems, the physician management arm of New York's Beth Israel Medical Center.
PhyMatrix also signed a 40-year deal to manage physicians connected with the medical center. PhyMatrix and Beth Israel will form a 50-50 joint-venture management services organization that will manage more than 2,000 independent practice association physicians affiliated with Beth Israel's parent corporation, Greater Metropolitan Health Systems. GMHS, which includes St. Luke's-Roosevelt Hospital Center, operates more than 2,700 inpatient beds.
The agreement is contingent on the closing of the MSO joint venture by Jan. 15, 1998.
U.S. Management Systems manages DOCS, a 130-physician multispecialty group owned by Beth Israel that has 20 offices. PhyMatrix said it committed up to $40 million to expand the GMHS delivery system as part of the deal.
Earlier this month, two other major physician practice managers followed PhyMatrix into the New York market. Nashville-based PhyCor inked a deal with New York and Presbyterian Hospitals Care Network to manage up to several thousand physicians in IPAs associated with its 30 hospitals. San Diego-based FPA Medical Management agreed to acquire Norwalk, Conn.-based Health Partners, upon which it intends to build a network of physicians in the metropolitan area (July 21, p. 8).
Eric Moskow, M.D., PhyMatrix executive vice president for strategic planning, said a scarcity of organized physician groups and strict corporate-practice-of-medicine laws may have delayed entry of other PPMs into the New York market. "I think people have just woken up to the fact that there is a large population there, that managed care is increasing," he said.