Business

New Atrius will be streamlined, smaller

3 doctors groups to merge; 3 others opt to split off

Three doctors groups that are part of the Atrius Health network will merge next month, moving from a loose affiliation to a unified organization aimed at responding more quickly to changes in the health care industry.

Each of the three groups, Harvard Vanguard Medical Associates of Newton, Dedham Medical Associates of Dedham, and Granite Medical Group of Quincy, have been separately managed. The merger will place them under one management in a single nonprofit corporation, reducing bureaucracy and administrative costs. The deal takes effect Jan. 1.

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The new corporation will encompass 750 physicians serving 650,000 patients and a home care agency under the Atrius name.

“It was important for us to be one organization, to be nimble,” said Dr. Daniel Burnes, interim chief executive of Newton-based Atrius.

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The new Atrius will be streamlined, but smaller. Now an affiliation of six independent doctors groups, three of them, with a combined 400 physicians, recently decided to split off. They are South Shore Medical Center in Norwell, Reliant Medical Group in Worcester, and Southboro Medical Group in Southborough.

Reliant and Southboro are pursuing their own merger. Dr. Armin Ernst, chief executive of Reliant Medical, which employs about 270 doctors in the Worcester area, said merging with Atrius would have been a long and complex process, distracting from Reliant’s work.

Instead, he said, merging with Southboro Medical, a 58-doctor group, would allow Reliant to focus on Central Massachusetts. The Health Policy Commission, which monitors health care costs, did a preliminary review of the Reliant-Southboro partnership and said Friday the deal was not likely to raise health spending, clearing the way for the merger to move forward.

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Like Reliant, South Shore Medical Center also preferred to focus on patients within its service area, which stretches from Quincy to Plymouth.

Even with these defections, Atrius will remain the largest independent physicians group in Massachusetts, Burnes said. With a single management structure, it will be easier to expand specialty services, open new sites, and make other changes. The Atrius merger does not require a review by the Health Policy Commission because the merging groups are already affiliated.

“As a unified group, even though it’s smaller, it will have more flexibility in entering into reimbursement arrangements, affiliation agreements,” and other deals, said Ruselle W. Robinson, a health care lawyer at the Boston firm Posternak Blankstein & Lund LLP.

Unlike other big physician organizations in Massachusetts, Atrius isn’t part of a hospital network. But it has affiliations with hospitals such as Beth Israel Deaconess Medical Center in Boston and Lahey Hospital & Medical Center in Burlington.

Atrius has been cited as one of the state’s higher-cost providers. Burnes said the merger will allow it to reduce expenses, invest in information technology, and spend $10 million on an innovation center to study ways to improve care delivery.

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.
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