Trying to build a bigger niche in the Baltimore medical marketplace, the largest independent group of primary-care doctors in the area announced yesterday that it has secured a $5 million capital commitment from St. Joseph Medical Center in Towson.
Baltimore Medical Group, which has 23 doctors in 16 offices, hopes to expand to 100 doctors. The group has formed a new management company, Doctors Health System, in which St. Joseph will hold a minority interest.
St. Joseph believes the investment will be profitable from an equity standpoint and help it secure a continuing source of patients, said John Ellis, chief financial officer. Doctors Health System is expected to contract with health maintenance organizations and other managed care insurers to provide all care for subscribers, including hospital services at centers like St. Joseph, which has 460 beds.
The arrangement differs from other hospital-doctor alliances because St. Joseph will not have a controlling interest, said Dr. Scott Rifkin, an internist who is president of Baltimore Medical Group and chairman of the management company.
"The uniqueness is you have a relationship with a hospital that has come into this without control. That should offer a tremendous advantage to having physicians become interested in this," Dr. Rifkin said. "For the most part, physicians have been a little bit wary of having their practices bought up by hospitals."
Last month Helix Health System announced a $30 million investment in a physicians' network called HelixCare that will serve the system's four hospitals. The system owns 60 percent of HelixCare.
Baltimore Medical Group was formed 18 months ago in response to the cost-cutting demands of managed-care insurers. By forming an organization in which they share financial risk and rewards, the doctors can team up to efficiently manage care for large groups of patients, according to Dr. Rifkin.
Doctors Health System will be run by Stewart Gold, formerly president of a for-profit subsidiary of Blue Cross of Western Pennsylvania.