Originally published November 27, 2018 at 6:12
pm Updated November 28, 2018 at 6:35 am
The Polyclinic, a 101-year-old
Seattle-based physicians group, will sell a controlling stake to UnitedHealth
Group, one of the largest players in a business being reshaped by
cross-industry acquisitions.
In yet
another move that shrinks the local community of independent physicians, The
Polyclinic, a 101-year-old Seattle-based physicians’ group, will sell a
controlling stake to UnitedHealth Group, one of the largest players in a
business being reshaped by cross-industry acquisitions.
The
deal, announced Tuesday by Minneapolis-based UnitedHealth Group CEO David
Wichmann during an investor meeting in New York, would merge Polyclinic’s
210-physician practice with a United Health subsidiary known as OptumHealth that
manages physicians’ groups around the country and is also acquiring the Everett
Clinic.
UnitedHealth’s
merger with The Polyclinic must still be approved by the Federal Trade
Commission, said Lloyd David, Polyclinic’s chief executive officer. While declining
to discuss financial terms of the deal, David said it was motivated by The
Polyclinic’s need to gain scale and additional medical capabilities.
“We
just realized a couple of years ago, doing our strategic plan, that it was
going to take more capital than we have, than the doctors have, to finance what
is ahead both in terms of growth and in terms of innovation,” David said
Tuesday.
Founded
in 1917 by six Seattle physicians, The Polyclinic has grown to become one of
the largest independent multispecialty physician groups in the Greater Seattle
area. Its physicians represent most medical specialties, and work out of 12
locations around the Puget Sound area as well as at Swedish Medical Center.
Yet
despite its status among physicians’ groups, The Polyclinic is dwarfed by other
Seattle-area health-care providers such as Swedish and the University of
Washington Medical Center. Its relative small scale has slowed The Polyclinic’s
efforts to expand into new specialties or develop its own technologies, both of
which tend to require major investment. Merging with OptumHealth, which last
year reported $20.6 billion in revenues, will allow The Polyclinic to tackle
“the things that you just need to be big enough to afford to do,” David said.
The
deal will also give The Polyclinic access to technologies and programs that
other physicians’ groups within the OptumHealth network have already developed.
An example, David said, is a palliative care program that it will now be able
replicate more cheaply and quickly than if it tried to create the program on
its own.
If the
deal is approved, it will represent the latest in a long line of local
independent physicians’ groups to be swept up in a wave of consolidations as
the state industry copes with rising medical costs and changing regulations
under the Affordable Care Act.
In
2016, the 500-physician Everett Clinic was acquired by DaVita Medical
Group. The following year, DaVita Medical Group acquired Northwest Physicians
Network, a 1,000-plus physician practice centered in Pierce County. In late
2017, DaVita Medical Group agreed to sell these and other practices to
UnitedHealth, though that deal is also pending federal approval.
The
wave of consolidations has resulted in a dramatic decrease in the percentage of
physicians in the state who are independent, says Jennifer Hanscom, CEO of
the Washington State Medical Association. In 1996, 38 percent of Washington
state physicians were in solo practice, Hanscom said. Today, the share is less
than 4 percent.
Correction:
An earlier version of this story incorrectly referred to solo practice
physicians as independent physicians.
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