Blue Shield of California venture Altais on Friday said it is acquiring Brown & Toland Physicians, a medical group serving 350,000 patients in the San Francisco Bay Area.
Altais, a healthcare services company Blue Shield launched last year, said the acquisition is meant to help Brown & Toland's network of 2,700 physicians stay largely independent by supporting them with the technology needed to succeed in value-based care and alleviating the administrative burden that leads to burnout. It's Altais' first acquisition.
"Our focus is not just to provide the tools and the services but to provide tools and services that really impact the ability for physicians to practice and take away the burden of practice that is swamping their ability to focus on their patients," Altais CEO Dr. Jeff Bailet said.
To that end, Altais will provide Brown & Toland with capital and a technology platform that includes practice management tools, predictive analytics, and telehealth, and will help the medical group roll out an electronic health record.
Kelly Robison, Brown & Toland's CEO, said the partnership would allow the medical group to expand its footprint geographically. Its physicians currently practice in seven California counties.
Robison said it has become tougher for physician groups to keep up with the changing healthcare system when not part of a larger organization. Less than half of physicians owned their own practices in 2018, according to the American Medical Association.
"It's challenging in terms of the level of technology, tools and infrastructure that physicians are really looking for in how you practice in today's world," she said. "Most physicians are starting to look toward wanting to be employed and wanting to have some of the infrastructure supporting their practices."
Blue Shield created Altais to provide those tools so physicians don't join health systems. When they do, costs inevitability rise, Bailet said. A 2014 study by Stanford University researchers found that hospital acquisition of physician practices led to significant increases in hospital prices and spending.
Bailet explained that Altais' acquisition of Brown & Toland won't have that effect because Altais doesn't own any hospitals and is not requiring physicians to keep its referrals within a high-cost hospital system. When asked if Blue Shield members would be steered toward Brown & Toland physicians, Bailet said Altais operates as a separate organization from Blue Shield with firewalls in place to protect information. Altais and Brown & Toland will continue to work with all health plans, he said.
Altais joins a number of health insurers and their subsidiaries that are buying up medical practices, helping them gain more control over where they spend their money. The most extreme example is UnitedHealth Group's healthcare services subsidiary Optum, which comprises almost 50,000 employed, managed or contracted physicians.
Humana operates at least 47 primary care centers for seniors in several states, and in February said it entered a joint venture with private equity firm Welsh, Carson, Anderson & Stowe to create more. Humana has also acquired stakes in Kindred Healthcare's home health, hospice and community care division, and hospice operator Curo Health Services.
Several Blue Cross and Blue Shield plans, including those in Florida, Texas and Tennessee, have launched their own primary care clinics with a company called Sanitas.
Correction: This story originally mischaracterized Altais as a subsidiary of Blue Shield of California. Altais is a startup in which Blue Shield is an investor.
