Owner of Shawnee Mission hospital set to buy Lawrence medical practice; deal creates questions of whether more is on the way
photo by: Chad Lawhorn/Journal-World photo
A longtime Lawrence doctor’s office is set to be sold to a large nonprofit hospital corporation, creating questions about whether the local health care market is about to become a whole lot more competitive.
AdventHealth — which operates what used to be known as the Shawnee Mission Medical Center system in Kansas City — is close to finalizing a deal to buy Family Medicine Associates, a four-doctor practice in west Lawrence that provides all types of general medical care.
The practice, at 4921 W. 18th St., is the first Lawrence presence for AdventHealth, which in addition to its Johnson County presence operates a hospital and several medical facilities in Ottawa, just south of Lawrence.
The company — based in Florida — entered the Kansas market in the early 2000s and has amassed a large footprint in the Kansas City metro area since then. In addition to the main hospital formerly known as Shawnee Mission Medical Center, it has three other campuses including in Lenexa, south Overland Park and along the College Boulevard corridor. Other facilities include free-standing urgent care centers, imaging centers, specialty practices for oncology, cardiology, urology and many other types of practices. It added its facilities in Ottawa in just the last few years. Nationally, it has health care systems in nine states.
While full-scale hospitals are rarely built these days, health care companies have gotten more aggressive in opening a variety of centers to conduct financially lucrative outpatient procedures. So, could AdventHealth be laying the groundwork to open other facilities in Lawrence, ranging from quick-service emergency care to same-day surgery to cancer care or any number of other specialties?
The company definitely wasn’t pointing in that direction on Wednesday. Despite the growing presence in the region, an executive for AdventHealth said the pending purchase of the doctor’s office wasn’t a sign of future major expansion in Lawrence.
“We don’t have any additional future plans for Lawrence right now,” said Scott Woods, vice president of physician network for AdventHealth MidAmerica. “Our entire focus is on a smooth transition for (Family Medicine Associates) into a partnership with AdventHealth.”
Woods said a desire to be in Lawrence was not the driving factor in the decision to purchase Family Medicine Associates. Instead, AdventHealth learned the physicians were considering a sale. The doctors involved, and their philosophies on health care, were a bigger factor in moving ahead on the deal, Woods said.
“We look for partnerships with individuals or groups that are like-minded and deliver health care in a similar or same manner as our mission, vision and values,” Woods said. “No question, that was the case here.”
Family Medicine Associates has been practicing in Lawrence since 2001, and currently has four doctors — Nathan Bloom, Loree Cordova, Jean Schrader and Dan Severa. The practice also has six physician assistants, said Kathy Severa, administrator for the practice.
Unlike other doctor’s offices, Family Medicine Associates has remained independently owned, rather than selling to LMH Health, which many providers have done over the last decade. Kathy Severa, though, said that strategy has some drawbacks in a health care world that is getting bigger and more complicated, especially from a technology standpoint.
“We were looking ahead,” Severa said of the relatively long process that has led to the pending AdventHealth deal. “With all that is changing, we felt like we needed to look for a partner.”
Plans call for Family Medicine Associates to remain at its current location with the same set of medical providers and staff. Expansion plans aren’t in the near term, although Severa said one of the appeals of partnering with AdventHealth is that future growth should be easier to obtain.
Severa said physicians at Family Medicine Associates still would have the ability to send patients to LMH, rather than to one of the hospitals owned by AdventHealth, for further care. Often doctors offices are coveted by larger medical systems because they can be a good source of referrals for hospitals and outpatient facilities. Severa said the physicians at Family Medicine Associates planned to remain “independently minded about where they send patients, based on what they are hearing from those patients.”
News of the pending deal certainly got noticed at LMH Health’s monthly meeting of trustees on Wednesday. Executives with LMH Health — the operator of the city’s only hospital and by far the largest owner of doctor’s offices and health care practices in the city — sounded notes of skepticism that AdventHealth wasn’t planning for a larger push into the Lawrence market.
Russ Johnson, president and CEO of LMH Health, told the hospital’s board that this was just another sign of how the health care industry was changing as it faced new pressures.
“We find ourselves with institutions that historically had been collegial that are now really competitive,” Johnson said. “It is to the point that we are putting imaging centers or emergency services or other delivery sites literally in the backyard of our neighbors.”
Lawrence has seen less of the intense health care competition than Johnson County, for instance. But there have been signs of it heating up in Lawrence before. The University of Kansas Medical System operates an orthopedic office in west Lawrence, for example, and Johnson was hired at LMH in 2016, in part, because he had been an executive in a highly competitive Colorado market, and LMH leaders at the time expected Lawrence to become more so.
“This isn’t the first and only notion of this coming to Lawrence,” Johnson said of the AdventHealth deal on Wednesday, “but for us, I think this was a startling one.”
Johnson said LMH “shouldn’t dismiss” the significance of the pending deal, and he said LMH needs to be prepared to communicate with the community about how additional competitors can hurt the overall mission of LMH Health, which operates as a nonprofit entity.
“Competitors are not here and did not enter our market to help us with our charitable mission,” Johnson said. “That is not what they are here for. They do not come here to say how can I help you with your indigent patients? How can I help you with all those services that you provide that lose money? Competitors enter the market for market-share reasons and for profitability reasons.”
AdventHealth, however, highlights its nonprofit nature too. It has an added element in that it is a faith-based system. AdventHealth’s founding is tied to the Seventh-day Adventist Church, and its website states its mission includes “working to extend the healing ministry of Christ around the country.” The company shared information reporting that AdventHealth provided a little more than $16 million in charity care through its Shawnee Mission health care network.
News of the pending deal comes at a time when LMH Health has been openly discussing finding a partner. LMH has been steadfast in saying it is not looking to sell to another provider and is not looking to give up any operational control of LMH Health. But it does want to explore whether it can collaborate with a larger medical system on some services. Neither party on Wednesday directly addressed whether AdventHealth was being considered as one of those potential partners.
“A partner is not a competitor,” Johnson, though, told the LMH board on Wednesday. “Those two are not compatible in the model we envision.”
Woods did not say whether AdventHealth has been interested in forming a partnership with LMH Health.
“I really don’t have a comment about Lawrence Memorial, other than to tell you we have the utmost respect for that organization and their legacy of caring for the Lawrence community,” he said.