Massachusetts health providers have been consolidating rapidly in recent years to gain the scale they say is needed to compete in an era of more coordinated medical care.
But the state’s largest alliance of physicians practices, Newton-based Atrius Health, appears to be going in the other direction. Just months after its board approved a plan to more tightly unite its seven doctors groups through a formal merger, Atrius — with more than 1,000 doctors treating 1 million patients at 50 locations — appears to be splintering.
Physicians at two Atrius practices, Reliant Medical Group and Southboro Medical Group, voted last month to break away from Atrius. The two groups are now talking about banding together and working with other health care providers in central Massachusetts.
Two other Atrius doctors organizations, Dedham Medical Associates and South Shore Medical Center, have also been considering whether to split off from the loose union of practices, according to health care officials familiar with their deliberations.
Their defection would leave 10-year-old Atrius with only its largest member, Newton-based Harvard Vanguard Medical Associates, along with two much smaller players, Granite Medical Group in Quincy, and the Visiting Nurses Care Network & Hospice of Worcester. Together, the three groups would represent about 60 percent of today’s Atrius.
A tighter alliance could help Atrius maneuver more effectively in a fast-changing health care marketplace. Last year, Atrius had been involved in three-way consolidation talks with Beth Israel Deaconess Medical Center and Lahey Health, but the talks collapsed in February.
“It’s like the European Union,” said Ruselle W. Robinson, health care attorney for Boston law firm Posternak Blankstein & Lund. “If you want to have more of an impact, especially when you negotiate with other organizations, you have to have someone who can speak for the organization. But it’s always difficult for people to give up power, especially physicians in private practice. They had always thought they could control their own destiny.”
Atrius released a statement Monday confirming it decided to merge its medical groups into a single organization. It said each group evaluated the plan, and that Harvard Vanguard, Granite, and the VNA Care Network opted to go forward. The statement said that while Reliant and Southboro were dropping out of Atrius, “Dedham Medical Associates and South Shore Medical Center continue in active discussions with Atrius Health” while also evaluating other options.
“Detailed transition plans will be developed for these changes that will take time to be implemented,” the Atrius statement said. “In the meantime, the groups continue to work together collaboratively as Atrius Health.”
Health care industry insiders, who spoke on the condition of anonymity because they were not authorized to discuss the situation, said the defections stem from the failure of the member organizations to agree on a plan for Atrius’s governance, including who would lead the new network, the role of board members, and the role of physicians post-merger.
Gene Lindsey, chief executive of Atrius from 2008 through the end of last year, had pushed for a merger that would make the organization less unwieldly and able to make quicker decisions. But he encountered resistance from physicians at some groups, including Harvard Vanguard, the largest and most powerful Atrius practice, who feared they would lose clout, according to the health care industry officials who tracked the negotiations.
While the divisions at Atrius were not a factor in the breakdown of the merger talks with Lahey and Beth Israel Deaconess — that had more to do with differences between the hospitals on who would lead the merged group — the Atrius board ultimately concluded in March that the medical groups should move forward with their own merger. But the groups were unable to reach a consensus on how a merged organization would be run.
“We want to be forward-looking and innovative and work on value-based health care,” said Dr. Armin Ernst, president of Reliant Medical in Worcester, who added that Reliant is talking to Southboro about building a new franchise. “We’re going to partner with other health care delivery systems in central Mass. and be the highest-quality system with the lowest total medical expense.”
Leaders of the other Atrius medical groups did not return phone calls Monday or referred them to a public relations firm representing Atrius. Lindsey said he had supported a formal merger of the physicians practices as well as a broader alliance with Beth Israel Deaconess and Lahey, with which Atrius has established clinical partnerships. While Lindsey, 69, said aligning Atrius with the two hospitals could form a market counterweight to Partners HealthCare, the powerful parent of Massachusetts General and Brigham and Women’s hospitals, he concluded it would be up to new leaders at Atrius to take the plan forward.
“Atrius is a marvelous organization composed of people who are really struggling with finding the way to go forward,” he said. “Figuring out how to make the transition from the old health care world to the new environment is a challenge for everyone in the nation.”
If it is able to keep its Eastern Massachusetts practices in the fold, Atrius could still be an attractive partner for teaching hospitals seeking to form a larger network, Robinson said. “They were one of the early organizations to buy into managed care, where they would manage the care of patients for a set fee,” he said.
But for Atrius to remain essential, he said, it will need to deliver more patients to those hospitals.