The start of 2016 has already seen two new partnerships highlighting the growing importance of physician services: Newport Health and Northwell Health have combined forces in a new company, Health Connect Technologies, and DuPage Medical Group, an independent, multi-specialty physician group, has officially linked up with growth equity firm Summit Partners.
Health Connect, the Newport/Northwell hybrid, is a technology platform that connects physicians, hospitals and other service providers, giving them the ability to track and follow a patient's journey. It also lends a platform for disparate organizations to monitor referrals, allowing greater collaboration on care.
Mark Solazzo, executive vice president and chief operating officer at Northwell Health, the new brand name for the former Long Island-Jewish Health System, said in a statement that the partnership was brought about primarily due to the shift toward accountable and value-based care, and an effort to meet the needs of providers and patients.
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"Because of the breadth and depth of our rapidly expanding health system," he said, "we need to have a holistic view of the entire organization and factor all the dynamics and changes in regulations, culture and technology into supporting our business strategies."
Gus Costalas, deputy executive director of of Lenox Hill Hospital and chief financial officer of Northwell Health's Western Region, said that piloting Health Connect at Lenox has increased patient satisfaction.
"In just over 18 months, we have successfully closed the loop for thousands of patients," he said, adding that the facility has reduced readmissions, increased the size of its ambulatory network and added to its revenue.
DuPage Medical Group, by contrast, won't be changing its name under its new affiliation with Summit Partners. It will, in fact, remain 100 percent physician-owned and directed.
The $250 million investment, finalized on Dec. 29, 2015, is a combination of equity and debt.
"We're a physician group that offers healthcare services in virtually every realm of the outpatient world," said DMG CEO Mike Kasper. "A good portion of our revenue comes from diagnostic imaging and radiation oncology."
It was a few years ago, he said, that the company first had aspirations of making the leap from a regional to a national force. Al that was lacking was the necessary capital.
"We felt we had an opportunity to not just grow regionally … but to come up with a national model," said Kasper. "We had a very healthy financial basis but didn't have the capital resources to become that national option. We needed a capital partner."
Enter growth equity firm Summit Partners, which is providing the needed capital while largely retaining DMG's structure; only the makeup of the Board of Directors will change slightly, with the current board -- consisting of physicians -- combining forces with additional members for a total of seven.
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"It's going to allow us to expand our capabilities in the population health management areas," said Kasper. "We're going to take a hard look at investments and things like expanding our technological capabilities. We're going to do some physical plant expansion to help put some access and value in the community, (and) we'll be finding acquisition targets in the management services space, not just the clinical delivery space."
He said joining forces with Pronger Smith Medical Care will be one of the first things the organization does to put its capital to use.
"We'd like to see our physician pool grow to 1,000-plus physicians," said Kasper. "We want to see overall revenue break the billion-dollar level. Which means we basically want to double our revenue … in a roughly five-year period."
Twitter: @JELagasse