Tech company buys 700-physician network in California

https://www.beckersasc.com/asc-transactions-and-valuation-issues/tech-company-buys-700-physician-network-in-california.html

There’s a new nontraditional company in town purchasing physician groups: a London-based digital health company.

Babylon, which provides virtual care and health monitoring services, purchased Novato, Calif.-based Meritage Medical Network in April and plans to open a new office in Palo Alto, Calif. Meritage has 700 physicians who are now part of Babylon, which aims to continue its U.S. expansion. Click here to read more about the transaction and Babylon’s strategic plans.

Meritage, an independent practice association, cares for a population of more than 500,000 and has relationships with eight hospitals and other healthcare providers.

This acquisition furthers the trend of nontraditional companies, such as insurers or retailers, employing physicians. Optum, a division of UnitedHealth Group, has the largest physician network in the U.S. with 56,000 affiliated, contracted or employed physicians. The company is on track to reach its goal of adding 10,000 more physicians this year after purchasing the 715-person physician group Atrius Health in Newton, Mass., in March.

In April, Humana purchased Kindred at Home, the largest home health provider in the U.S., for $5.7 billion. It also rebranded its healthcare services arm in March as CenterWell, which includes 90 Conviva primary care clinics.

Walmart and CVS both also have telehealth services as well as brick-and-mortar clinics that employ healthcare providers. Amazon announced plans to broaden its telemedicine program to offer services to large U.S. employers. The nontraditional entrants are focused on bringing primary care physicians into their networks, which are often a big referral source for specialty care and ASC physicians.

As insurers, tech companies and retailers see more opportunities in healthcare, ASCs will be attractive targets as efficiently run healthcare businesses. Optum already has a chain of hundreds of ASCs, as part of Surgical Care Affiliates, and Amazon Care’s services include treatment for back, neck and joint pain.

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