Bend, Ore. – A few months after Bend Memorial Clinic announced it was cutting jobs and specialties, its CEO said Thursday the company is officially entertaining sale or merger offers.
The Bulletin reports that the physician-owned multispecialty practice has struggled financially since implementing an expensive new electronic health records system in 2015. The company’s financial outlook was among the factors that pushed the CEO — about eight months ago — to prepare for a partnership with a larger organization, whether that be a health system or private investor.
“We will reach a point where we can no longer make the investments in the community that we need to make,” said BMC CEO Dr. David Holloway, “and so having an outside partner would be really beneficial.”
While there are no formal offers on the table currently, Holloway said “lots of people” are interested in talking to BMC. In the past, proposals were evaluated informally. Now, with the help of a consulting firm, BMC has a formal process for evaluating purchase, merger or other partnership offers that come in. An ultimate decision would be made by BMC’s board of directors, Holloway said.
The CEO declined to provide the names of BMC’s board members, but said the chairman is Dr. Russell Massine. BMC is owned by a group of physician stakeholders.
The Affordable Care Act accelerated the “bigger is bigger” mantra in health care, as many of its changes were easier to implement on a large scale versus at smaller clinics, said Richard Gundling, senior vice president for healthcare financial practices with the Healthcare Financial Management Association.
If a provider is struggling financially, that doesn’t necessarily mean it wouldn’t be attractive to a private equity firm or health system — in fact, it might make them more attractive if the buyer sees potential, said Spaanstra, who’s based in Nashville.
Spokespeople for health systems Providence Health & Services, Kaiser Permanente and PeaceHealth said they’re not in discussions with BMC. Representatives from other health systems did not respond to requests for comment.
BMC last year cut about 20 jobs and eliminated neurology, wound care, anti-coagulation and occupational medicine — lingering effects from the 2015 investment in the new electronic health records system. The books aren’t closed on 2016 yet, but Holloway said he expects the company to break even.
Despite the financial dip, Holloway said switching to Epic was still a good decision.
“It’s just a harder investment than what we thought,” he said, “but ultimately, if the world continues to head in a direction of population management, then it’s really the best tool in the United States and probably in the world for helping health care organizations be able to do that.”
