Cor­po­rate takeover

Cerner, P&G ex­pand into clin­ics, concierge care

Modern Healthcare - - The Week In Healthcare - An­dis Robeznieks

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.

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