Alter said the acquisition will allow Summit Health to accelerate its transition to primary care-focused value-based care arrangements while continuing to expand the number of locations.
by Crain Health Pulse spoke with Alter on Tuesday about the company’s post-acquisition growth plans and how the final deal could affect patients in the New York metropolitan area.
When was the first talk about this acquisition?
We know VillageMD because we sold a medical corporation we owned a few years ago in the Phoenix area to VillageMD. We’ve had casual conversations for about last year and sometimes heat up in late summer. We worked hard during October and came to this conclusion by the end of the week.
Was there ever a consideration for someone else’s acquisition, or was VillageMD always a partner?
We had some conversations with others along the way. We have always left our options open to remain independent and seek a public offering, or have always had an option to refinance with another private equity partner.
What does a deal like this give patients in the New York metro area?
This just makes so much strategic sense. They have the expertise we’re building—focusing on primary care, taking risks, managing people care. For our patients in the tri-state area, [the acquisition] provides us with a level of expertise that we will have to build over the next few years. It really accelerates our connected care model, allowing our primary care physicians to adapt the tools and processes that VillageMD has honed.
Tell me more about the shift to more value-based care arrangements and how you foresee changing the way care is delivered in your location.
We all recognize that our patients have difficulty navigating the healthcare system. Our mission is to try to reshape that through this power of connection and put that primary care physician at the heart of that model. That primary care doctor is truly the best equipped to see you as a whole. You may not be able to see your primary care doctor. You go to CityMD and it’s a single medical record—your primary care doctor will be notified and that doctor in CityMD has your record and can provide what you need at the time but can also bring you back if you need something else inside our system.
What will change on the ground?
We will start later [the deal closes] to discuss with the VillageMD team what this can really bring to this market. I think the possibility of experimentation—perhaps bringing primary care to several CityMDs, linking more CityMDS to a single independent primary care office. It’s exciting to see if we can use technology—a virtual care environment or something like that—to really improve our ability to get health care on a personalized basis. patient.
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What is your prediction for your visits and revenue in 2023?
I won’t go into specifics, but we’ve had around 20% growth in both our revenue and earnings over the past few years, and we fully expect that to continue. that level in the next few years.
Slides of the deal record $2.9 billion in revenue for 2022.
Well, it’s about where revenue will be steady and margins in or around the mid-to-high youth group.
Will there be a transition to a new technology platform?
VillageMD folks use EMR just like us, so that works fine. It will accelerate some of the consumer tools we’re looking to build. They have built a very good data and patient-centered environment that sits at the top of the EMR like ours. This will accelerate some of the things we hope to build over the next few years — patient-oriented tools like online scheduling — because we won’t have to change our EMR to take advantage of it.
Will the acquisition affect predictions of how many facilities you might have by the end of 2023, 2024?
We continue to work on our own strategic plan, which helps us open new locations in New Jersey, Westchester, southern Connecticut, on Long Island, and another in New York City. We certainly, like every company, have a list of projects we don’t have the funds to support. We’ll have those conversations and strategically look at the total capital of the company and decide if we can do more. At a minimum, over the next few years we will continue on the path of building 15 to 20 new CityMDs per year, building at least one very large center per year and then many smaller facilities to accommodate the our growing number of doctors.
What are some projects on that wish list with more capital?
Perhaps the first conversation we had was a very large campus-like setting on Long Island—in the 150,000 to 200,000 square foot range—where we were able to create a deep multidisciplinary model, like our Berkeley Heights and Florham Park locations in New Jersey. Then maybe a few more midsize establishments in southern Connecticut in the Fairfield County area.
Do you foresee CityMD brand expansion to other states?
VillageMD has a very strong brand in the markets they are in, so it goes without saying, but I think we’ll want to take the CityMD model but maybe keep the VillageMD name in those markets. That is an area for discussion. We will definitely review the data before making a final decision.
This story first appeared in our sister publication, Crain’s New York Business.
