LMH completes deal to buy one of the largest doctor groups in Lawrence; talk of more health care shakeups continues
There is a new trend in the Lawrence medical industry, and thankfully this one doesn’t involve a doctor trying to convince me that Doritos — hello, they’re corn — aren’t part of the vegetable group. Instead, it involves independently owned doctors’ offices being bought by hospitals. The latest deal involves one of the largest primary care practices in the city being bought by Lawrence Memorial Hospital.
LMH and The Reed Medical Group have finalized a deal in which five of the doctors at Reed have become employees at LMH. The hospital took ownership of the practice on July 1, and the name changed to Reed Internal Medicine. The practice continues to be located in its longtime building at Fourth and Maine, which is essentially across the street from the hospital.
Janice Early, vice president of communications for LMH, said the transition for patients should be relatively seamless. The doctors involved in the deal are Donald Hatton, Joan Brunfeldt, Lida Osbern, Philip Hoffmann and Walter Farrell. Drs. Elaine Kennedy and Eric Huerter will be affiliated with the group but won’t be LMH employees. As we have reported, those two doctors have been operating under a different business model. They offer “concierge” service, which confused me because I thought I had found a doctor who not only would endorse my Dorito intake but actually deliver them to me on my couch. Instead, the service refers to more of a membership model for health care. The doctors take on a limited number of patients, and each patient pays an annual fee to have extended access to the physician and to receive more in-depth treatment and preventive services. Huerter and Kennedy will continue to operate out of the Reed building and will continue to have privileges at LMH. They’ll operate their practice separately, though, under the name Reed Medical Group MDVIP Affiliates.
Early said the other doctors in the Reed Group approached LMH about taking over their practices. She said that is becoming a more common scenario as regulations, information technology demands and other such items become more demanding for independent practices.
“I think they look to the hospital as a potential partner because we have the infrastructure in place to handle those issues, and they can focus on practicing medicine instead of the business side of medicine,” Early said.
Reed becomes the eighth primary care practice owned by LMH. In addition, the hospital owns 13 specialty care practices. The deal comes on the heels of news that LMH is in negotiations with OrthoKansas to form a partnership to build a new state-of-the-art orthopedic facility in Lawrence. We reported in March that the two sides were in serious negotiations to build a multimillion-dollar facility that provides services in hand, shoulder, elbow, foot, ankle, hip and knee replacements and other such services.
Early confirmed that those discussions are still underway, and the hospital remains confident that a deal will be struck with OrthoKansas, perhaps by the end of the summer.
Talk of an OrthoKansas partnership came after KU hospital reached a deal with Dr. Jeffrey Randall — a sports medicine doctor who previously was with OrthoKansas — to open a new orthopedic practice in Lawrence. Randall’s practice, which is part of the University of Kansas Health Systems Sports Medicine and Performance Center, has moved into its new facilities at the Corporate Centre off of Wakarusa Drive. The practice represented the first time KU medical system set up operations in Lawrence, but it may not be the last such partnership. KU medical system officials have said they “are working with other health care organizations in Lawrence to identify collaborative practice opportunities.”
KU’s move into the market may spur a host of strategic moves in the Lawrence health care market. Russ Johnson, the relatively new CEO at LMH, has made exploring partnership opportunities an important part of LMH’s strategic plan. Early said the deal with Reed was a significant one because of Reed’s long history in the community and its standing as one of the largest primary care practices in the city. Primary care practices are particularly valued because those doctors often are a patient’s first point of contact with the health care system.
All the talk of strategic partnerships has created questions about whether LMH is looking to create its own deal with another larger, metro hospital. The KU hospital certainly could be a player on that front. The KU medical system has reached deals with hospitals in Hays and Topeka recently to expand services there. But there could be other players as well. The Kansas City market includes large hospitals, including Overland Park Regional Medical Center, the St. Luke’s System, the Olathe Medical Center and others. In Topeka, Stormont Vail is a large player.
Johnson, who previously was a health care administrator in the Denver area, came from an environment where partnerships were common. Early confirmed the hospital engages in a variety of discussions with other area hospitals, but stopped short of saying there were any current talks of a merger.
“Literally from day one, Russ has reached out and been open to talking to other hospitals and other providers, both east and west,” Early said. “It is a discussion. I don’t know what the future will hold. Are we in active discussions about joining another hospital? No. But we are talking with other hospitals about how we can work together. That door is open and we will keep that door open.”