CHW Sells Emergency Management Group Back to Physician Group
To help cut financial losses, Catholic Healthcare West announced yesterday that it has "sold selected assets" of Meriten Emergency Medicine Management back to Roseville-based Emergency Physicians Medical Group, the company that originally sold the management group to CHW in 1998, the Sacramento Bee reports. The Roseville group will now partner with the Emergency Physicians Medical Group of Washington state and the Sacramento-based Sutter Emergency Medical Associates to run the group, which will be renamed EMSource. While CHW will "continue to own Meriten," it will "wind down its remaining operations," and EMSource will take over Meriten's administrative and billing services contracts for emergency physicians in the three groups, which collectively serve 31 hospitals in California, Nevada, Washington and Hawaii. Terms of the sale were not disclosed. According to EMSource representatives, the break from CHW will allow the management group to reduce administrative costs and broaden services to a greater number of physician groups (Rapaport, Sacramento Bee, 6/5). EMSource CEO Dr. Joshua Rubin added that the purchase was a "business decision and will have no impact on patient care" (Colliver, San Francisco Chronicle, 6/5).
For CHW, the move was part of a "corporate overhaul" after the not-for-profit hospital system posted operating losses of nearly $318 million in 2000, the Bee reports. John Wray, senior vice president of managed care for CHW, said that ownership of Meriten "no longer made sense," because its physician groups contributed to much of last year's losses. In the past year and a half, CHW has also ended its relationships with two other medical groups (Sacramento Bee, 6/5). CHW CFO Michael Blasyk said, "We wanted to focus on our core business, [which] is the running of hospitals. Physicians' groups are not our core business and we think physicians' groups are better equipped to be involved in running their own affairs" (San Francisco Chronicle, 6/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.