CAMINO MEDICAL GROUP: Rumored To Seek Affiliate In Bay Area
"Camino Medical Group, one of the Bay Area's largest physician groups, is in talks with at least three suitors regarding a possible affiliation," the San Jose Business Journal reports. "[S]ince splitting last year from El Camino Hospital in Mountain View," the 150-member physician group has faced financial difficulty. Camino Medical Group, which currently serves 140,000 patients at its 13 area sites, faces a $6.5 million debt. Physicians' pay was "cut by 18% last year, including pay checks in November and December that were half their usual size." According to David Gorn, a spokesperson for Palo Alto Medical Foundation (PAMF), "one of the potential partners," the agreement being discussed "is not a merger, but probably would include an infusion of assets and money to help capitalize Camino." He said, "They're trying to rebuild their infrastructure and they need capital." He added that Camino is poised to make a "decision within 30 to 60 days." However, Dr. Elizabeth Vilardo, chair of Camino, "denied that any alliance was imminent" and said that the group was doing some financial restructuring to put itself "on better financial footing."
Bigger And Bigger
San Jose Business Journal reports that the other suitors are rumored to be Sacramento-based Sutter Health and Nashville-based PhyCor Inc. "Camino's affiliation with either PAMF or Sutter would create a 'monolithic' competitor," according to San Jose Medical Group head Dr. Victor Corsiglia. Vilardo said "we have a long-term admiration for (both), but it doesn't go any further than that." She "acknowledged that to remain financially viable, Camino eventually may need to ally itself with another group." She also said an affiliation with either Sutter or PAMF "would be particularly attractive because both groups, unlike Camino," are nonprofit organizations and, as such, "can depreciate capital expenditures without paying tax." Vilardo appeared to rule out a PhyCor affiliation, which, if it went forward, "would mark PhyCor's first foray into Northern California and likely panic local doctors," according to Corsiglia (Delevett, 3/30).