Physician staffing giant TeamHealth has purchased an emergency physicians group in La Mesa, Calif., the company announced this week.
The deal marks yet another move in the physician staffing industry, which has consolidated heavily in the past two years. However, the industry also has faced increasing scrutiny as many patients receive out-of-network bills from physicians who work in those groups.
TeamHealth bought Grossmont Emergency Medical Group, a group that staffs and manages the emergency department at Sharp Grossmont Hospital in La Mesa. The group treats more than 100,000 patients per year. Terms of the deal were not disclosed.
The publicly traded TeamHealth has actively pursued acquisitions in the past few months, especially after the company met head-to-head with activist investor Jana Partners. TeamHealth announced earlier this month it purchased Anesthesia Associates of Cincinnati and Pain Management Associates. The acquisition is expected to add more than 43,000 anesthesia cases to TeamHealth's portfolio.
Also, in June, Knoxville, Tenn.-based TeamHealth bought the Tri-City Emergency Medicine Group of Oceanside, Calif., a group that treats more than 70,000 patients annually at Tri-City Medical Center.
TeamHealth is one of the largest physician staffing companies, employing more than 19,000 physicians and advanced clinicians across 3,400 acute and post-acute facilities nationwide. The company's net revenue increased by 28% in the second quarter of 2016 to $1.12 billion, compared with $878 million in the same quarter a year ago, due in large part to buying medical groups. However, TeamHealth's profit in the second quarter dropped by more than 35%.
Its acquisition of IPC Healthcare in November accounted for 21% of revenue. TeamHealth purchased IPC in a $1.6 billion deal. The purchase came soon after it rejected a $7.8 billion buyout offer from rival AmSurg Corp. in October.
AmSurg announced plans to merge with Envision Healthcare Holdings in June, which would create the largest physician staffing and surgery center firm in the country. Together, AmSurg and Envision have a market capitalization of $10 billion.
Another rival, Mednax, also has been expanding. The Sunrise, Fla.-based firm announced in June its acquisition of Northwest Anesthesia, a practice of 128 anesthesiologists and anesthetists in Minneapolis. Mednax made waves in 2015 when it expanded into teleradiology with a $500 million acquisition of Virtual Radiologic Corp.
The growth in physician staffing firms has raised some confusion about the role physicians play in hospitals. Many patients have encountered surprise bills from out-of-network physicians who work at Mednax and others, even though patients have gone to in-network facilities. Hospitals, doctors, insurers and state regulators have tried to resolve those issues by holding patients harmless.
