HCA Acquisition of 24 MedSpring Locations Furthers Integration of Health System-Urgent Care Partnerships
By Ben Garber | August 16, 2019
In a move further highlighting the integral role of ambulatory care in population health management programs, at-risk contracting, and the health system referral value chain, HCA Healthcare has purchased 24 MedSpring urgent-care centers from Fresenius Medical Care. The centers are located in Austin, Dallas, and Houston. Nine of the acquired centers are attributed to St. David’s Healthcare, an Austin, TX-based health system, and operate with the St. David’s name, while the remainder operate under HCA’s CareNow brand including 8 centers attributed to the Dallas-Fort Worth Medical City Healthcare. St. David’s operates 7 hospitals as well as 9 ambulatory surgery centers (ASCs), and 13 specialty outpatient health centers. Medical City Healthcare operates 14 hospitals, as well as 11 ASCs, 8 free-standing ERs, and 4 Medical City Children’s Urgent Care clinics; in addition to 32 other CareNow locations. With the acquisition, CareNow will operate 160 urgent care centers across the country.
The sale marks an exit from the state of Texas for MedSpring, which will continue to operate 36 urgent cares in Atlanta, Baltimore, and Chicago. Austin, TX-based MedSpring was founded by former WellCare CEO Heath Schiesser and Chief Medical Officer on Belsher, M.D. with an investment from Summit Partners in April 2011. In 2014 MedSpring merged with Baltimore, MD based ChoiceOne Urgent Care. Summit Partners invested $29.6 million in the platform and realized $55 million three years later in the June 2014 sale to Germany’s Fresinius Medical Care, best known for its network of outpatient kidney dialysis clinics.
Coinciding with the MedSpring acquisition, Fresenius acquired a 80%+ stake in Sound Inpatient Physicians Inc.,for approximately $600 million in a recapitalization that included management and existing investor TowerBrook Capital Partners. At the time Sound Physicians was expected to generate $500 million in annual revenue. In June 2018 Fresenius realized proceeds of $2.15 billion in the sale of its stake in Sound Physicians to Summit Partners and UnitedHealth Group’s OptumHealth. Sound Physicians is forecast to generate $1.4 billion of revenue in 2019.
In many ways, the integration into HCA hospital-based Texas footprints is a natural progression of the partnership between the two groups. In 2014, MedSpring partnered with Boston-based non-profit health system Partners HealthCare in a joint venture to create Partners Urgent Care. Through the joint venture the health system was able to expand patient access to care, better control the total cost of care through lower-cost site of service options, and provide efficient service and quality care by partnering with an experienced operator. The arrangement between Partners HealthCare and MedSpring was one of a growing trend in health system urgent care partnerships, such as those between CityMD and CHI Franciscan in Seattle, WA, MedExpress and Atlantic Health in New Jersey, and those by GoHealth Urgent Care with Mercy in St. Louise, MO, Charlotte, NC-based Novant Health, and San Francisco’s Dignity Health. Partners HealthCare, which also operates its own health insurance plan, was itself formed through a similar joint venture between Bringham and Women’s Hospital and Massachusetts General Hospital that partnered with HCA to manage its hospital-based health system.
 Summit Partners  St. David’s Healthcare  D Magazine  https://www.utah.gov/pmn/files/461069.pdf  Fresenius Medical Care  Fierce Healthcare  Partners Healthcare  CHI Franciscan  7 Mile Advisors  GoHealth Urgent Care  Business Wire  Dignity Health