North Memorial Health is continuing its push into primary care with the acquisition this week of a medical practice with three clinics in the north metro.
The Robbinsdale-based health system did not disclose a final purchase price, but reported in a financial statement earlier this year a tentative agreement to purchase Multicare Associates for $5.3 million.
Multicare stood out as one of the last independent primary care practices with multiple locations in the Twin Cities, where most clinics are controlled by large hospital-based health care systems.
North Memorial is best known for its large medical center in Robbinsdale and co-ownership of Maple Grove Hospital. In addition, the health system now operates a network of 18 primary care clinics including the three Multicare locations plus another three clinics opened by North Memorial over the past three years.
"We really want to provide access to our customers in a way that is easy and convenient for them," said Jennifer Close, the president and chief ambulatory officer at North Memorial Health. "We've had a long-term relationship with Multicare."
The medical practice includes locations in Blaine, Fridley and Roseville. In Blaine, Multicare and North Memorial jointly operated an urgent care center.
Multicare has about 16 physicians and a similar number of nurse practitioners and physician assistants, said Matt Brandt, the practice's chief executive. For years, Multicare has championed the cause of independent physician practices in the face of ever-increasing consolidation of clinics and hospitals in large health systems, Brandt said.
The doctors at Multicare wanted to remain independent, Brandt said, but found themselves up against broader economic trends in health care that promote consolidation. Much like the doctors at Multicare, North Memorial is committed to providing cost-effective care, he said.
"Large health systems get reimbursed significantly more on a per-visit basis than Multicare does," Brandt said. "It's not just Multicare — it's all smaller independent clinics."
The deal closed on Monday. In a statement, North Memorial said patients will not notice any disruption or change of care.
Close, the North Memorial official, said the health system has a strategy of trying to bring together multiple health care services at particular "destination locations."
Going forward, North Memorial will look at working with Multicare, Close said, to bring together at one location primary and specialty care along with lab and imaging services.
The market for hospital and clinic services in the Twin Cities has been consolidating for at least 20 years, with the drive toward even bigger health systems continuing in recent years.
In June, Minneapolis-based Fairview Health Services merged with St. Paul-based HealthEast. Four years ago, the St. Louis Park-based Park Nicollet merged into Bloomington-based HealthPartners, which is both a health insurance company and operator of hospitals and clinics.
Brandt, the Multicare chief executive, wrote an opinion article three years ago in a trade publication called MD News that lamented how health care costs can grow, as a result.
"Large health care systems have a great deal of leverage when negotiating with insurance carriers; they use this leverage [to] get higher reimbursement rates," Brandt wrote. "So, when a small medical practice merges with a large health care system, the services previously provided by the small practice tend to get reimbursed at a higher rate, which in turn is passed to the customer."