IPC The Hospitalist Company Acquires Michigan Geriatric Practice

John Commins, for HealthLeaders Media , May 27, 2010

IPC The Hospitalist Company, Inc., the North Hollywood, CA-based hospitalist group practice, has acquired Continuum Geriatric Services PLLC in Livonia, MI. Financial terms of the deal were not disclosed.

CGS practices in more than 60 nursing and assisted living facilities in Michigan, where IPC has an established presence. CGS has an annualized volume of approximately 105,000 patient encounters.

Adam Singer, MD, chairman/CEO of IPC said the acquisition of CGS "represents continued expansion for IPC into closely related business segments that focus on the management and coordination of facility-based care."

"The highly dedicated geriatric physicians and midlevel providers at CGS offer IPC's Michigan operation an opportunity to improve coordination and integration of patient care with the goal of improving overall quality and offering a better experience for patients and their families," Singer said in a media release.

Jerry Wilborn, MD, co-founder of CGS, will join IPC as a practice group leader for the region's sub-acute practice groups. "This is a culmination of our long-term vision for developing a true continuum of care for our patients," Wilborn said. "IPC is well established in the area's acute care hospitals, and is best situated to develop a comprehensive program for care of the elderly in this market."

Deutsche Bank analyst Darren Lehrich estimated that the purchase "will add about 20 practitioners and is one of the larger sub-acute practices of its kind in the U.S. While revenue per encounter is slightly lower for these types of practices than hospitals, the gap is converging and we estimate revenue per encounter between $80-90 for a practice like this."

Lehrich estimated that "IPC paid roughly 1x revenue for CGS. The acquisition with 105,000 patient encounters will add roughly 3% to IPC's volumes and an estimated $8.4 million in revenue based on a Q1 run-rate numbers."

"We would not be surprised if IPC announces other similar investments ahead of their investor day scheduled on June 10," Lehrich wrote.

John Commins is a senior editor with HealthLeaders Media.

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