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Fort Wayne medical practice splits, following industry trend

July 2, 2010

A Fort Wayne medical practice is breaking up, with most of the physicians set to become employees of one of the city’s two hospital systems in September.

Hospitals are hiring physicians at an accelerating pace nationally. The same is true among the four major private hospital systems in Indianapolis.

The Fort Wayne practice, the 28-doctor Indiana Medical Associates LLC, includes specialists in internal, diabetes, lung, kidney and digestive medicine.

At this point, 11 of those physicians will join the Parkview Health hospital system and eight will join Lutheran Medical Group, a subsidiary of the Lutheran Hospital system, said CEO Lowell Teska. The remaining physicians are pursuing other options.

Also, all of the practice’s 102 staff members are likely to get jobs at one of the hospital systems, Teska said. However, as a legal precaution, Indiana Medical Associates filed a WARN Act notice with the State of Indiana on Tuesday, because the employees would technically lose their jobs before being hired by one of the hospitals.

It’s not clear yet how many employees will go to each hospital system, or perhaps to another employer, Teska said.

Indiana Medical Associates faces pressure similar to that experienced by many physicians in Indianapolis who have paired up with hospitals. For example, the St. Vincent Health system in Indianapolis recently acquired The Care Group, which includes 130 primary care and cardiology physicians.

Physician reimbursement has been squeezed substantially, as the federal Medicare program and private insurers have recently cut rates for many specialists  and put up barriers to physicians’ ability to make money using imaging and other diagnostic equipment.

“By doing these alignments, it’s just a better machine for ensuring that quality continues to be delivered at a high level while funding or reimbursements decline,” said Teska in an interview Friday morning.

In addition, the new health care law, signed by President Obama in March, authorizes the federal Medicare program to split any cost savings achieved by teams of doctors and hospitals, called accountable care organizations, which improve the quality of care.

“There are some benefits in physicians and hospitals coming together,” Teska said, adding, “Cost improvements will occur due to physicians and hospitals working together in an integrated fashion.”
 

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