Hospitals' interest in acquiring physician practices appears to be increasing, as evidenced in last week's announcement of three separate deals that would place almost 300 physicians and their more than 800,000 patients under hospital control.
Modern Healthcare first reported on hospitals' desire to buy doctors again, a strategy that in many cases failed miserably in the 1990s (Jan. 3, p. 8). The revived strategy comes as physicians, in turn, are trying to save struggling hospitals (See story, p. 8).
Tufts-New England Medical Center in Boston will add 164 primary-care physicians to its existing corps of about 60 network physicians in an effort to boost referrals in the city's highly competitive healthcare environment, officials said. Following the lead of other hospitals around the country that have built new networks for patient referrals, the 394-bed medical center said it will purchase the assets of Braintree, Mass.-based Primary Care, which has about 500,000 patients. The sale is expected to close by the end of the third quarter.
"This alliance is good for Tufts-New England Medical Center, for our physician colleagues and for the patients we serve," said Tufts-New England President and Chief Executive Officer Ellen Zane, in a statement.
Meanwhile, Cincinnati-based TriHealth, which operates two hospitals, will purchase Group Health Associates, a multispecialty physician practice that serves about 300,000 patients in the metropolitan area, officials from the two companies said. Terms of the deal were not disclosed. Group Health, a 104-member group, is expected to merge sometime this summer with TriHealth, which operates Good Samaritan Hospital and Bethesda North Hospital, both in Cincinnati. Officials said the new partnership, similar to several other deals in recent months between hospitals and large doctors' groups seeking collaboration on referrals, will allow a "seamless integration" of healthcare services to patients in the area.
Finally, the medical group affiliated with John Muir-Mt. Diablo Health System, Walnut Creek, Calif., paid $1.25 million to acquire the assets of Rossmoor (Calif.) Medical Center, a seven-physician clinic that serves a nearby gated community for seniors. Under the terms of the deal, John Muir-Mt. Diablo signed a 15-year lease agreement for the clinic, with an option to purchase the building at fair market value in 2010. The new 100-physician clinic will open Aug. 1 under the name John Muir at Rossmoor.
The deal gives John Muir-Mt. Diablo access to about 9,200 seniors who live in the gated community. Rossmoor Medical Center's original physicians declined an offer to join the John Muir-Mt. Diablo network and said they were opening a competing facility nearby. John Muir-Mt. Diablo is a two-hospital, not-for-profit system with 377 beds.
--with Laura B. Benko