Hospitals continue to gobble up physician practices, a trend that accelerated with Wake Forest Baptist Medical Center’s planned purchase of High Point-based Cornerstone Health Care, the state’s biggest doctor-owned medical group (“Docs on the block,” July 2014). Officials of both groups declined to discuss terms of the transaction, which will add 80 offices and more than 300 doctors to the 12,000-employee workforce. Grace Terrell and John McConnell, who head Cornerstone and Wake Forest Baptist, respectively, pledged to be pioneers “in valued-based care delivery, providing exceptional health care quality while reducing costs.”
Cornerstone has a reputation for excellence, with the federal Medicare program last year ranking it the sixth-best accountable-care organization based on various quality measures. But the trend toward paying medical bills based on outcomes, rather than per treatment, and increased costs of technology and compliance with health care reform is driving thousands of North Carolina doctors into the financially sheltering arms of large health care systems. The hospitals say an integrated, data-driven network can glean best practices, reduce costs and improve quality. The Centers for Medicare and Medicaid Services “has a goal that 30% of Medicare payments will be of the alternative model this year and 50% in 2018,” says David Meyer, senior partner of Keystone Planning Group consultants in Durham. “Medicare’s huge, so you have to be a player or you’ll get killed financially.”
The acquisition also bolsters Winston-Salem-based Wake Forest Baptist as it competes with Greensboro-based Cone Health and Winston-Salem-based Novant Health. “Baptist and Novant have been very competitive in that market,” says Dawn Carter, president of Ascendient Health Care Advisors in Durham. UNC Health Care’s acquisition of High Point Regional Hospital in 2013 “brings in another big system to compete.”
Signs had pointed to likely change at Cornerstone. Two years ago, several dozen doctors bolted for a UNC-affiliated physicians group, and Cornerstone this year sold its 17-member cardiology practice to High Point Regional. Cornerstone’s financial health drew attention when two former doctors testified in a trial last year that they departed because of concerns over the group’s future. CEO Terrell says the sale reflects a desire to improve quality, rather than money issues. In any case, Cornerstone’s importance extends beyond its exam rooms: It is one of High Point’s biggest employers with more than 1,000 workers.
GREENSBORO – Apollo Global Management will buy The Fresh Market for about $1.36 billion in cash, or $28.50 per share. The grocer operates 186 stores in 27 states, including 22 in North Carolina. New York-based Apollo is a private-equity company with about $170 billion in assets under management.
WINSTON-SALEM – BB&T will buy insurance broker Swett & Crawford from London-based Cooper Gay Swett & Crawford for $500 million in cash. The deal will increase BB&T’s insurance revenue by $200 million, or 15%. BB&T is the fifth-largest U.S. insurance broker.
HIGH POINT – Thomas Built Buses will add a second shift at its local plant, creating 200 jobs including welders, robotics technicians and skilled mechanics. The bus-maker is a subsidiary of Portland, Ore.-based Daimler Trucks North America.
PROFILE
Apple co-founder Steve Wozniak was named Innovator in Residence at High Point University. “Woz,”who was the university’s commencement speaker in 2013, will assist students in computer science, physics and other disciplines with projects and developing business ideas through campus visits and digital communication. Other technology leaders who have visited the campus to work with students include Twitter co-founder Biz Stone, Netflix co-founder Marc Randolph and former Yahoo Vice President Seth Godin.
“[HPU’s] focus on student development is second to none,” Wozniak, 65, said in a news release. “And their leadership is dedicated to the personal and professional development of their students. How they deliver it is truly innovative.”