Over the past several years, health systems, physicians and for-profit management companies have been investing more into ambulatory and urgent care centers as patient care increasingly has been moving to lower-cost and more convenient locations.
For example, eight-hospital Beaumont Health in 2018 partnered with Atlanta-based WellStreet Urgent Care to open 30 urgent care centers in metro Detroit.
Other health systems expanding their ambulatory service line include Henry Ford Health System, Trinity Health Michigan and Michigan Medicine. Aside from thousands of physician offices, a number of doctors own and operate urgent care clinic chains.
But some doctors want other alternatives to hospital employment. Some of these doctors are looking at the backing of well-financed private companies that can compete with hospital-based systems that are trying to capture the primary care market to boost their inpatient specialty care monopolies.
VillageMD, which a subsidiary of privately owned Village Medical, is one of those private companies. It was founded in 2013 by CEO and Chairman Tim Barry, Chief Medical Officer Dr. Clive Fields and Chief Growth Officer Paul Martino.
In 2019, several private equity firms led by Kinnevick AB provided more than $100 million in financing to help expand VillageMD into 51 employed clinics in Illinois, Texas, Georgia, Kentucky, New Jersey and Arizona. Other investors include Oak HC/FT, Adams Street and Town Hall Ventures.
Barry said physicians are attracted to VillageMD for several reasons, including higher reimbursement opportunities, access to technology, capital and an alternative to hospital-owned practices.
“We’re seeing as a phenomena across the country a lot of primary care doctors who work for hospital systems who don’t feel like they have the same kind of resources available to them as the model we represent,” said Barry. “We are seeing a fair amount of primary care doctors leave hospital-based employment and come to organizations like us.”
Until recently, Barry said, the only viable options a physician had was to remain independent, possibly join a physician organization, or to sell or affiliate with a hospital, Barry said. “Now we represent a really good other option.”
Barry said VillageMD prefers to employ primary care doctors and invest in their practices.
“Some doctors love this model and know it’s the future of medicine,” said Barry, who did graduate studies at Michigan State University. “They say, ‘yes, I’m comfortable being a part of the Village medical employee group.’ Some want to partner first.”
Barry said the company also invests in nurses, social workers, pharmacists and technology. “By joining Village Medical, providers will be able to leverage our high-tech, high-touch primary care model to provide exceptional care and service to more patients,” he said.
In a 24/7 clinic format, VillageMD patients are offered primary care, same-day appointments and can tap into telehealth virtual health visits, Barry said. Services also include preventative care, treatment for illness and injury, and management of chronic conditions such as diabetes, congestive heart failure, chronic obstructive pulmonary disease and kidney disease.
“We’re not a back-office administrator. What we do is we help these physician practices move into a (risk-based contracting model with Medicare Advantage, private payers or employers), said Barry. “Doctors we work with are committed to driving higher quality and lower total costs.”
Barry said Michigan’s health care costs are higher than national averages.
“Detroit has a pretty high cost of health care, which to us is symbolic of the health care system not meeting the needs of the population,” Barry said. “There’s a lot of ER visits, there’s a lot of unnecessary hospitalizations. There’s way too many readmissions.”
In a statement, Sikorski said he believes VillageMD will help their practice grow.
“Amid COVID-19, patients now understand the importance of a relationship with their primary care provider,” Sikorski said.
Sikorski and Brock’s VillageMD practice, located at 35150 Nankin Blvd. in Westland, will officially begin services on March 9. Colton’s practice at 400 N. Wayne Road in Westland will open under the VillageMD banner on May 11.
In September 2019, Walgreens invested $1 billion to open a number of Village Medical at Walgreens locations, beginning in Houston and Phoenix. Another 600 to 700 Walgreens locations in 36 markets, including Michigan, are expected to open in the next five years.
“We have been talking with Walgreens for the better part of two years,” Barry said. “They asked if we’d take over their urgent care clinics in their stores. We talked about a different model, especially to serve patients with chronic disease. We would recruit the same doctors as now and patients have easier access. It will take significant redesigns to stores and to incorporate our ideas to better integrate pharmacists as part of the care team.”
While Walgreens and private equity firms hold more than 50 percent ownership stakes in the company, Barry said Village Medical management and employees have the largest single ownership stake and also controlling votes on the board.
Barry said metro Detroit is partially consolidated in the primary care area and there is room for more physician practice mergers.
“We work across 12 different markets in the country and we’ve got a pretty good spectrum where some markets are highly fragmented, like Houston, and then others that are highly consolidated like Indianapolis,” Barry said. “I probably put Detroit somewhere in the middle.”
This story originally appeared on the website of Crain’s sister publication Crain’s Detroit Business.