The trend continues of independent doctors opting to merge with or sell their practices to larger medical groups.
Minneapolis-based Allina Health System announced Tuesday that it has acquired Apple Valley Medical Clinic, a primary-care clinic and urgent-care center in Dakota County with more than 70,000 patient visits in 2018. The news followed word last month that two more independent practices are merging with Infinite Health Collaborative, a group launched last year that combined four medical groups including Twin Cities Orthopedics.
The cost of technology, regulatory compliance and administrative infrastructure for maintaining a medical practice are all factors driving office-based physicians to consider consolidation, said Dr. Keith Stelter, the president of the Minnesota Medical Association.
“Consolidation is an ongoing trend, not only among physician practices but in all of health care,” Stelter said in a statement. “In order to maintain viability and local access to care, more and more medical practices need the financial and operational support that larger organizations may offer.”
Financial terms were not disclosed for either of the recent deals.
Allina Health System is one of the state’s largest nonprofit groups, with $4.3 billion in revenue and about 1,400 physicians in 2018. Apple Valley Medical Clinic employs about 150 people and includes seven primary-care doctors plus more clinicians who staff its urgent-care center, said Sally Wahman, an Allina vice president.
“Allina has had a presence in the building for quite some time — we have specialty services, a pharmacy and imaging there,” Wahman said. “Dakota County is a very important part of the Allina service area, and we’re excited about having the opportunity to have a primary-care practice and an urgent care in addition to those specialty services.”
Called i-Health for short, Infinite Health Collaborative said it’s growing through deals that aren’t acquisitions, but affiliations where all physicians remain owners in the practice. The group announced in late January that it was expanding to include Preventive Cardiology Clinic in Edina as well as Colon and Rectal Surgery Associates, a practice with offices in Minneapolis and other communities.
The cardiology practice joined i-Health on Jan. 1, while the colon and rectal surgery group plans to join this spring. The deals add 16 doctors to the group, bringing the total to 179 physicians.
“Colon & Rectal Surgery Associates has served the Twin Cities metropolitan area for over 50 years,” said Dr. Michael Spencer in a news release. “We feel the partnership with i-Health will provide additional resources to serve our community and allow us to continue our educational endeavors into the foreseeable future.”
Health care providers at all levels continue to find that size matters, said Allan Baumgarten, an independent health care analyst in St. Louis Park.
“It is increasingly difficult for smaller, independent practices to raise the capital, to recruit and retain doctors, to exert leverage in negotiations with payers,” Baumgarten said via e-mail.