TeamHealth continues buying spree of medical groups

CAL/AAEM News Service calaaem.news.service1 at gmail.com
Sun Sep 25 17:05:08 PDT 2016


       

 

August 24, 2016

 

TeamHealth continues buying spree of medical groups

 

 

 
<http://www.modernhealthcare.com/article/20160824/NEWS/160829975?utm_source=
modernhealthcare&utm_medium=email&utm_content=20160824-NEWS-160829975&utm_ca
mpaign=financedaily> Modern Healthcare

 

 

By Maria Castelucci 

 

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.

 

 

 

Jeff Wells
Deputy Editor, CAL/AAEM News Service

 

Brian Potts MD, MBA
Managing Editor, CAL/AAEM News Service



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