May 15, 2017
CENTRAL MASS IN BRIEF

Reliant acquisition would change nonprofit status

PHOTO/NATHAN FISKE
Reliant President and CEO Tarek Elsawy

Reliant Medical Group's decision to be acquired by for-profit OptumHealth will change the physician network's tax status, allowing it to generate revenue for the cities and towns where it owns real estate.

At an offsite meeting May 9, the 230 physician members of Reliant unanimously voted to be acquired by Optum, a Minnesota-based division of national insurer UnitedHealth. Trustees voted to approve the deal, which is pending state regulatory review and approval, in April.

The potential tax revenue the acquisition will generate is significant for Reliant's home city of Worcester, said Timothy Murray, president and CEO of the Worcester Regional Chamber of Commerce. Murray said he hopes Reliant will continue its role as a major provider and employer under Optum, adding Optum has carved out an important niche focused on efficient healthcare delivery and technology.

"Those are key ingredients in bending the healthcare cost curve," he said.

Reliant spokesman Michael Masseur said the medical group will continue to employ its workforce of 2,500, including physicians, staff and management, and Reliant will continue to serve patients through multiple insurance plans.

The company is one of the top 10 largest employers in Central Massachusetts. It posted $677.5 million in annual revenue last year, has offices throughout Central Massachusetts and in MetroWest, including its Southboro Medical Group locations.

Reliant trustee Kevin O'Sullivan, president and CEO of Massachusetts Biomedical Initiatives in Worcester, said a sale to Optum is the right strategy for Reliant, given the uncertain financial outlook for healthcare providers.

"The board and the doctors all gave this thing great thought, were very pensive about it," O'Sullivan said. "You stand still, or you move forward."

Employee retention

Details about the sale, including a price and transaction date, were not available as of press time. A UnitedHealth spokesman did not return requests for comment by deadline and Reliant did not reveal those details.

Masseur said the vote is a key step in ensuring the group stays at the forefront of delivering high-quality health care in the region.

"Reliant expects to bolster its ability to grow and expand, modernize many of its clinical facilities, have access to advanced data analytics capabilities, and attract top medical talent to its practices," he said in an email statement.

Should the agreement receive necessary approvals, Reliant would continue to be locally operated and serve patients under the Reliant Medical Group brand in the Central and MetroWest regions, including the Southborough Medical Group offices, acquired by Reliant in 2015.

"This is the beginning of a process that will strengthen Reliant and position the organization for continued success in the ever-changing and challenging healthcare industry," said Tarek Elsawy, president and CEO of Reliant.

Lynn Nicholas, president and CEO of the Massachusetts Health and Hospital Association, issued a statement Wednesday following news of the vote. Though she did not comment specifically on the planned acquisition, Nicholas said such deals will increase as the healthcare system undergoes rapid transformation.

"Partnerships between physician groups and hospitals and health systems, or physician groups and hospitals and insurers, will be more common in the future as these entities strive to deliver care within a framework of a population health approach," Nicholas said.

Staff Writer Laura Finaldi contributed to this story.

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