Mid-Michigan Physicians, P.C. Joins McLaren Health CareIn a move that broadens its health care offerings in the greater Lansing market, McLaren Health Systems is acquiring Mid-Michigan Physicians (MMP), one of the largest private practice medical groups in the region.
MMP is a Lansing-based multi-specialty physician network of approximately 100 providers. When completed, the healthcare providers and other staff will become McLaren employees. MMP facilities will become part of the hospital network.
“Mid-Michigan Physicians began the process of looking for a partner in 2013,” said Bill Hardimon, who in October became president and CEO of McLaren Medical Group, the hospital systems primary care and specialty physicians network. He had been MMP’s chief executive officer.
“A committee narrowed the potential partners down and ultimately chose McLaren Health Care because we felt they would be a strong partner in our pursuit to improve our patients’ and community’s health and wellness,” Hardimon said in an email exchange. “We signed a letter of intent in February 2014 and have been exclusively working with McLaren since.”
He expects MMP and McLaren to be legally integrated by January 2015, with “clinical and operational integration” extending into 2015. There are no regulatory issues involved in the sale between the hospital system and MMP’s 48 physician owners. “The transition will be fairly seamless from a patient standpoint,” Hardimon said.
The purchase of private practices by hospital systems is happening throughout the country. Both parties see opportunities as well as challenges by joining together in an increasingly complex health
For hospitals, the mandate is better outcomes including: decreasing the length of stay, less medical intervention, avoiding re-admissions and patient satisfaction. The goal is integration of the many health care services they provide.
“How and where we deliver health care is changing,” Hardimon said. “Traditionally, primary care physicians were focused on a patient’s care in the office setting and hospitals were focused on the care provided inside their walls. Those worlds are becoming increasingly intermingled and community-based physicians and health systems need to work together in new ways to manage a patient’s overall health, not just an episode of care.”
Integrating McLaren and MMP broadens the hospital’s service base. It expects most of the medical providers and the staff affiliated with MMP to join the McLaren system. “MMP is a well-run organization that provides exceptional clinical quality. McLaren wants to enhance that and learn from them. In fact, we expect McLaren to benefit from some of MMP’s operational knowledge and incorporate some of their best practices into other McLaren offices,” Hardimon added.
For doctors there are mixed reasons for choosing to work for a hospital system rather than a private practice.
“With a hospital there is a greater sense of alignment. It’s also getting down to the business of medicine — having all of the HR issues, benefits issues and billing taken care of by the hospital. Sometimes it is just a lifestyle issue,” said Dr. James Grant, president of the Michigan State Medical Society.
“One of the reasons physicians work for hospitals is financial stability. There is shared risk and an improved quality of life. The next generation of physicians has often said this is what they want.”
Grant said the trend with hospitals and doctors reflects the evolution happening in health care and other industries. “On the hospital side, they are consolidating,” Grant added. “On the physician side, they are also consolidating.”
And he noted another trend reshaping the health industry: for-profit corporate practices. Grant, an anesthesiologist at Beaumont Hospital, said he works for MEDNAX, a national medical group that provides an array of physician services. These are big businesses. Shares in the company trade on the New York Stock Exchange. It has a market cap of $6.3 billion and annual revenue of $2.4 billion.
Another large corporate practice, TeamHealth, which also traded on the NYSE, in July 2013, acquired Tri-County Emergency Physicians, PC, which managed and staffed the emergency department at Memorial Health Care in Owosso, Michigan. MEDNAX has a market cap of $3.8 billion with $2.7 billion in revenue.
“In many cases, the doctor never even works for the hospital where he practices,” Grant said.
MMP as a private practice served patients with nearly two-dozen different specialties and Hardimon expects the health care providers in most of those fields to join the McLaren system.
What patients may notice are higher charges for some services. According to insurers and area physicians, once McLaren assumes ownership of MMP’s offices, it may be able to charge higher hospital facility rates for some services like radiology or stress testing.
“There could be some variation in fees,” said Helen Stojic, spokesperson for Blue Cross Blue Shield of Michigan. “There are two payments. One is what the doctor gets paid and one is the facility fee.” She explained that payers like Medicare or Blue Cross Blue Shield recognize that hospital populations are high risk, which merits the higher charges.
Hardimon said McLaren has yet to determine how it will structure its MMP related billing codes and procedures.
“McLaren prides itself on creating value for patients by delivering quality outcomes through cost effective services,” he said. “Once MMP is fully integrated into McLaren, it’s important for patients to know that bills for services at MMP will come from McLaren. It’s also important to note that MMP providers will continue accepting the insurances they did before joining McLaren.”