A little over six months into the union of Ascension Health and Presence Health hospital systems, plans to cut the number of outpatient sites in half are underway.
The services offered at 250 outpatient facilities and medical offices will be consolidated among 125 ambulatory-care locations over the next two years, said Mark Frey, CEO of Amita Health, the joint operating company formed by Ascension and Adventist Health System, which absorbed the 10-hospital Presence system in the Catholic health providers' March merger. The consolidation builds on the $150 million ambulatory care expansion plan announced last year by Amita.
The cost of the plan may change due to the system adding 170 sites following Ascension's acquisition of Presence. An assessment is in the works, Trisha Cassidy, executive vice president for chief physician alignment and ambulatory services officer at Amita, said in an email.
The crux of the plan, however, remains the same. It involves bringing smaller facilities together in large, retail-like locations—many of which previously housed big-box stores like Kmart.
Mergers and acquisitions are driven by diversification, not size alone, said David Smith, founder of consultancy Third Horizon Strategies. It's figuring out, "How do I bring a different service line into the business, how do I bulk up and become more competitive in cardiology or neurology or other related areas?"
With the integration of functional areas like finance and human resources complete, Amita chief Frey said it's time to focus on building a strategic plan for the future. That includes identifying the types of physical structures that will be "most responsive to the needs of patients for the next decade," he added.
of the physician practices Amita has acquired over the years have only one or two doctors, which Frey contends isn't the most efficient or effective model. The plan is to bring groups of six to nine physicians together with specialists and ancillary services, like imaging capabilities, he said.
Amita "has become really good at acquiring smaller systems in different geographies and then linking them to this central entity," Third Horizon's Smith said. "Where (consolidation) can work really well is when you bring in a system and you can create cost efficiency for the system because you're linking it to the other efficiency assets you've built over time. . . .That competency takes a long time to build. I don't think all systems could do that as well as an Amita could."
"Amita is shrinking its outpatient sites by half" originally appeared in Crain's Chicago Business.
