Providers merge in California

MemorialCare Health System has announced the affiliation of Greater Newport Physicians with its MemorialCare Medical Foundation and the acquisition of Nautilus Healthcare Management Group, Greater Newport’s affiliated management services organization. The merger is expected to increase the health system’s negotiating clout.

Barry Arbuckle, president & CEO of MemorialCare Health System says the transaction makes his company more attractive to health plans.

“It gives plans a high value, managed-care savvy, integrated delivery system for their members. It also allows the plans to contract with one network for a broad geography, and that network includes hospitals, physicians and outpatient centers strategically located throughout Orange County and an important region in Los Angeles County as well as a staff ‘employment’ model and an IPA option.”

He predicts plans will continue to look for strategic partners that can provide high value care across a broad spectrum of products.  While he acknowledges the merger provides some clout for MemorialCare Health System to use during negotiations with plans, Arbuckle says that only goes so far.

“If we use our clout to negotiate above market rates, we will be excluded from certain products, which ultimately will impact our membership and profitability. Therefore, it’s critical to use that clout strategically to ensure all partners benefit-our hospitals and their workforce, primary care and specialty physicians, health plans, and most importantly, the patients, families and communities we serve.”

He says greater integration among providers will also provide more clout with some of the drivers of healthcare costs, such as medical device vendors on the hospital side and practice management costs on the physician side.

Greater Newport Physicians serves more than 100,000 Orange County, Calif., residents through its 400 physicians, comprised of 140 in primary care and more than 250 representing more than 50 specialties. With 400-plus employees, Nautilus Healthcare Management offers services to physician groups, Independent Practice Associations (IPAs) and physician offices.

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