In late 2018, a private medical group called Optum bought a controlling interest in The Polyclinic. The latter was a 100-year old Seattle group of specialty physicians which, over the years, had developed a close working relationship with Swedish Medical Center. In fact, in Seattle, the primary Polyclinic facility was literally across the street from Swedish. The Polyclinic purchase was part of an acquisition program that was recently highlighted by Optum’s purchase of a large Houston-based physician group – Kelsey Seybold – for $2B dollars. The Houston group includes cancer and women’s health centers, two ambulatory surgery centers, and a sleep center. Optum’s recent moves help demonstrate that big medicine is clearly big business.

With the Kelsey-Sebold purchases, Optum now employs 60,000 physicians in more than 2,000 locations in the U.S. It may employ as much as 6% of all physicians in private practice. The press release announcing the purchase said it would “bring coordinated, value-based care to patients and employers” and would do so with higher-quality care at a lower cost. 

Optum is a division of UnitedHealth Group, a for-profit company which started as a pharmacy-related company, but expanded into direct health care and health insurance coverage. The changes in its business model reflect a growing trend for large multi-state entities to take control of what was locally-based medical care.

We have prior blog posts that describe the development of multi-state hospital groups buying up local hospitals. Catholic Health Initiative (now merged into a larger entity called CommonSpirit Health) now owns the former St. Joseph hospital and related medical facilities, as well as the numerous other hospitals throughout the Puget Sound region. 

The jury is still out, however, on whether these acquisitions will actually result in better care at lower cost. Certainly, at the beginning, such mergers and acquisitions involve many changes in policies and procedures, electronic record systems, and leadership, which may increase costs. The response is that the larger groups can be more efficient in managing costs and in purchasing supplies such as drugs. 

From the viewpoint of medical malpractice, these changes also raise questions. In Washington, as in many other states, the “standard of care” is defined in terms of reasonable and prudent local providers, not a national standard. If the majority of physicians now are employed by multi-state medical groups and hospitals, how is the standard of care to be measured?