Two of Greater Hartford’s largest physician groups say they aren’t interested in becoming part of a large hospital network, so they’re planning to join forces to protect their independent business models.
Connecticut Multispecialty Group (CMG) and New Britain’s Grove Hill Medical Centers plan to merge their 185 doctors this year. And while their combination is in line with the consolidation trend sweeping across Connecticut’s healthcare industry, they’re bucking independent doctors’ inclinations to join hospitals.
“Sooner or later, there’s only going to be hospital-based groups or large groups of doctors,” said Dr. Michael Genovesi, Grove Hill’s CEO. “That’s our big thing. We really want to remain independent. We think that’s the best way to practice medicine.”
His CMG counterpart, Dr. Jarrod Post, echoed similar sentiments.
“We see doctors making choices that are to either stay independent or join other entities,” Post said. “The pressure is higher than ever.”
The CMG-Grove Hill deal would be a merger of equals, and the new organization would likely operate under a different name.
Post and Genovesi say they’ve been approached by and turned down a number of would-be acquirers and partners, because they think the physician-run model means a better lifestyle for doctors — with more flexible schedules and sometimes better pay — as well as better care for their patients.
But if they’re going to do a deal — and they each realize at some point they must — Grove Hill and CMG would rather team up together, because the two have a shared history and similar business models and philosophies, Post and Genovesi said.
The merger will create a group that, size wise, ekes past Hartford Healthcare Medical Group’s 175 doctors and nips at the heels of ProHealth Physicians’ 235 doctors.
CMG and Grove Hill both say their practices are financially strong and doctors aren’t feeling any desperation to do a deal right now. But like many healthcare providers, they see benefits in getting larger, particularly as insurers and components of the Affordable Care Act press physicians to trim costs through population-based care.
“We see more of these contracts that are either shared savings or in some other way valued-based continuing to come forward,” Post said.
That type of care requires increased tracking of patients, more collaboration between doctors and providers, and greater investment in the right software and IT infrastructure. Bigger organizations have a better shot at doing it more effectively, they say.
In addition, both practices have complementary geographies and a wide variety of specialists that can keep patients in house, which leads to better coordination of care, they say. Their combination could also mean taking a piece of a patient’s healthcare expenditures from other area providers.
The benefits of bigger
Medical industry experts say the CMG-Grove Hill merger is significant, but it’s also part of a larger trend.
“Being a small organization, you’ve got to get bigger to have clout with the payers and to have clout with the electronic health record companies and all that other stuff,” said Douglas Arnold, who until recently was CEO of Middletown’s Medical Professional Services, which negotiates for and provides services to more than 400 doctors.
Genovesi said there’s no denying that creating a stronger negotiating position with payers and hospitals is part of the strategy, though he said the combination will also mean better outcomes for patients, which is a benefit for all sides.
He said the groups made sure to keep the region’s largest healthcare provider, Hartford Healthcare, apprised of the deal, since CMG and Grove Hill both have important patient-care contracts at Hartford Hospital and The Hospital of Central Connecticut.
“We’d be lying if we said bigger is not better,” Genovesi said. “It is.”
Asked for its reaction to the planned merger, Hartford Healthcare released a statement calling CMG and Grove Hill “respected medical groups.”
“Hartford Healthcare looks forward to continuing our work together with their members and patients as these two groups form a new affiliation,” the statement said.
Though the two groups decided to announce their merger intentions in late 2014, there is still much to do before the deal is finalized.
Like most mergers, each side will vet the other for undisclosed legal liabilities or other problems.
One key decision will be deciding if the merged group will do all of its own negotiating with insurers, Genovesi said.
While Grove Hill has always done all of its own negotiating, CMG is a member of Hartford Healthcare’s clinical integration organization, called Integrated Care Partners. That entity, which includes both Hartford Healthcare doctors and those in private practice, negotiates on CMG’s behalf for value-based contracts.
It is undetermined whether or not Grove Hill and CMG would remain in that organization post-merger.
“Our [agreement] says before we sign the contract, we must agree on how those steps will go,” Genovesi said. “We will all have to vote on that, but whatever happens, it has to be united.”
Much in common
CMG and Grove Hill are, in many ways, mirror images of each other.
In fact, a physician left Grove Hill in 1997 to form CMG, which has grown to just over 100 doctors in a relatively short amount of time. Grove Hill is one of the oldest physician groups in New England.
Both are owned by doctors with a wide range of specialties. There are no investors or other equity partners. Both are close with Hartford Healthcare.
They also share similar democratic, physician-owned management structures, in which doctors become equal partners and each has one vote on business matters.
The two feel they fit together well, both geographically and in the services they offer. CMG’s 17 offices and Grove Hill’s dozen offices blanket Hartford County, with Grove Hill’s presence more evident in the southern communities. “[CMG] is very strong in Hartford and that whole area, and we’re like a very big fish in a small pond around here,” said Genovesi from his New Britain headquarters.
Both also say they don’t feel the immediate need to do a deal.
“It’s a pleasure to come at this from a position where we are financially solid,” said Post, adding that CMG’s revenues have grown 30 percent over the past five years. Grove Hill also just had its strongest month, Genovesi said.
Giving credit
Jack Reed, CEO of ProHealth Physicians, the biggest physician group in Greater Hartford that’s not hospital owned, said any move that strengthens patient care in the region is a plus.
“I think they’re like-minded organizations and have a good shot and being successful in the integration of their two practices,” Reed said.
Though they compete in some respects, ProHealth focuses largely on primary care, so its doctors send some of their patients to CMG and Grove Hill specialists.
“We depend on a well-run Grove Hill and Connecticut Multispecialty Group,” Reed said. “It’s an opportunity to be more productive partners with them.”
