PHYSICIAN PRACTICE: Large Groups Buying Back Independence

      Cardinal Healthcare has entered an agreement with three hospitals in North Carolina's triangle region, allowing the 80- physician group to buy itself back from its troubled partner, MedPartners. Cardinal, which has about 200,000 patients, will sell a minority partnership to UNC Health Care, WakeMed and Rex Healthcare, which in turn will lend Cardinal "millions of dollars." Investment banker Doug Townsend said, "You could certainly look at [the three hospitals] as the white knights riding in on the white horses." The Raleigh News & Observer reports that the arrangement appears to give the three hospitals "an edge in the managed care marketplace against Duke University Health System" (Obermayer/Glascock, 4/1).

Fleeing MedPartners
     
      Mid-America Medical Affiliates physician practice, a 4,400-doctor group in the Kansas City area, has agreed to buy an 11% stake in Kansas City-based HealthNet, the Kansas City Star reports. Mid-America President James Mallow said, "Physicians tend to advocate for the best care of their patients, and insurance companies tend to advocate for economic gain. We see this as something that will provide a balance between the two." A majority share of HealthNet, which has about 400,000 members in HMOs and PPOs, is owned by St. Luke's-Shawnee Mission Health System (Karash, 3/29).

Breaking Up is Hard
      Boston-based Lahey Clinic is buying out its partner, Harvard Pilgrim Health Care, taking full ownership of 12 eastern Massachusetts physician practices jointly managed by the two since 1994, the Boston Herald reports. Dr. Carl Soderland, Lahey's medical director of community medicine, said the "change will have no effect" on the PPM's 75,000 patients, but "it will make it easier for doctors to contract with other insurance companies." Harvard Pilgrim's Geoff Coffman said that "Lahey wants to expand but Harvard Pilgrim doesn't want new practices" (Heldt Powell, 3/30).