Cerner, P&G expand into clinics, concierge care
Two very different corporations—one that hawks personal consumer products, and another that sells information technology—recently expanded their small but potentially huge footprints in the healthcare provider arena.
And the reason why, experts say, is that despite so much existing uncertainty from looming reform and the poor economy, people still believe there is a lot of money to be made in providing healthcare.
Late last month, Cincinnatibased Procter & Gamble Co. increased its ownership stake to 100% from 48% in MDVIP, a Boca Raton, Fla.-based national network of 350 physicians operating concierge primary-care practices. Meanwhile, Kansas City, Mo.-based IT provider Cerner Corp. reached an agreement to acquire IMC Health Care, a Jacksonville, Fla.-based operator of 23 workplace clinics for 15 different corporations. The deal is expected to close in the first quarter.
Financial terms were not disclosed in either deal.
“I think Procter & Gamble is a pretty smart company, because the future of primary care is in direct practices like ours,” said Thomas LaGrelius, board chairman of the Society for Innovative Medical Practice Design (formerly the American Society of Concierge Physicians). “Right now there are about 300,000 primary-care doctors and all are dying on the vine except for those doing direct practice. Procter & Gamble can see the writing on the wall and wants to invest in this business.”
Although he prefers not use the term concierge, LaGrelius estimated that there are between 5,000 and 10,000 physicians now providing that type of practice where patients avoid insurance companies, pay an annual fee, see their doctor regularly, and are promised access when they want and need it. He predicts some 10,000 to 20,000 more primarycare physicians will be practicing this way in a few years.
MDVIP practices are currently capped at 600 patients, and LaGrelius—who said he respectfully declined an offer to be part of the network—said the MDVIP business model calls for a practice operating at full capacity generating about $300,000 annually for the network.
“MDVIP makes a profit, and they have a visible product and brand, and a recognizable name,” LaGrelius said. “Procter & Gamble took the biggest franchise player in the
LaGrelius: Future of primary care is in companies like MDVIP.