UPMC, Butler Health to take control of North Hills surgeons group Tri Rivers

Oct. 18--Western Pennsylvania's largest remaining independent multi-specialty medical practice will soon be in the hands of UPMC and Butler Health System through a joint venture.

McCandless-based Tri Rivers Surgical Associates has 21 doctors, more than 200 employees and nine outpatient surgical sites and electromyography units in the North Hills, Butler County and Armstrong County. On Jan. 1, when the deal is completed, the new practice will be called "Tri Rivers Musculoskeletal Centers Inc."

Though it's characterized as a joint venture, the salaries of all Tri Rivers physicians and employees will be managed by UPMC, the venture's majority partner. Tri Rivers specializes in orthopedics and spine care, as well as physical rehabilitation.

Both UPMC and Butler Health confirmed the purchase via emailed statements.

"UPMC has a [longstanding] successful collaborative relationship with BHS and we are pleased to partner with them on this joint venture that helps ensure the continuation and expansion of quality health care provided by this exceptional group of physicians and health care professionals," said Steven Shapiro, who is UPMC's chief medical and scientific officer and president of UPMC's health services division.

Ken DeFurio, president and CEO of Butler Health System, said in a statement, "This opportunity is consistent with BHS's approach to sometimes act independently, and at other times collaborate with strong partners. This is an example of collaborating with such a partner."

Last year, Butler Health and the much larger UPMC announced a similar venture, jointly acquiring Butler Radiation Oncology Associates.

Nationally, the number of independent physicians clinics are dwindling. Locally, the attrition among independent doctors is even more pronounced, given UPMC's thirst for expansion and Pittsburgh insurer Highmark's desire to build a competing hospital system, the Allegheny Health Network.

As recently as 2012, physician leaders at Tri Rivers said they had no intention of selling out to hospital chain. But times change.

"In an era when health care is changing both nationally and regionally, independent practices such as ours must strategically align themselves with strong partners," said D. Kelly Andrew, physician, president and managing partner at Tri Rivers.

In an interview, Dr. Andrew said federal health care reform presents new challenges that make private practice "very uncertain."

Selling to the practice -- which was founded more than 40 years ago in what was then a newly built Passavant Hospital -- to the joint venture "was a difficult thing to even consider. We have deep respect for the leadership at Highmark," and had sit-down conversations with Highmark officials, he said.

The acquisition presents a good-news, bad-news scenario for UPMC's rival, Highmark Inc.

The good news is that Highmark's commercial customers -- the under-65, non-Medicare, non-Medicaid customers -- will still be able to visit Tri Rivers because the practice will be owned by a joint venture and was not purchased outright by UPMC. Highmark subscribers can see Tri Rivers physicians at their various outpatient office locations and at Butler Memorial Hospital.

They can't, however, see Tri Rivers specialists at their UPMC Passavant or UPMC St. Margaret practices, starting Jan. 1.

The acquisition by UPMC and BHS also subtracts from the pool of independent North Hills surgeons available to Highmark's Allegheny Health Network.

AHN recently opened a new medical pavilion in Pine, called the Wexford Health + Wellness Pavilion, with several operating rooms. But with this latest acquisition, UPMC has tied up most of the region's orthopedic surgeons, and by extension their patient and referral load.

Tri Rivers Surgical Associates receives about 120,000 patient visits a year.

Financial terms of the deal weren't released; the sale is being implemented in phases. Tri Rivers' physical therapy unit is already under the control of UPMC's Centers for Rehab Services, and the practice's 12 orthopedic surgeons are now under contract with UPMC. The rest of the employees will be brought aboard by year's end.

Bill Toland: [email protected] or 412-263-2625.

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