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updated: 3/3/2011 5:40 PM

Northwest finalizes merger with physician group

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Arlington Heights-based Northwest Community Hospital said Wednesday it has finalized its acquisition of Riverwoods-based Affinity Healthcare, making the group's physicians and their staff direct employees of the hospital for the first time.

Northwest also is looking to acquire other physician groups as well, said Northwest spokesman Blaine Krage.

"In the next couple of years, we're hoping to increase the number of physician," said Krage. He declined to name the other physician groups.

As of Wednesday, Northwest absorbed about 200 new employees from Affinity, which includes 42 physicians and clinicians. The rest are support staff. Affinity also has offices in Arlington Heights and Buffalo Grove. An Affinity spokeswoman could not be reached for comment.

Northwest has been extending its reach outside its Arlington Heights campus by opening medical and rehabilitation centers in Rolling Meadows and Schaumburg and it aims to open a new facility in Mount Prospect by next year.

Earlier this year, Northwest indicated its plans to merge with Affinity Healthcare and for the first time employ its 200, including the 42 physicians and clinicians.

At that time, several suburban doctors began to mull the choice of remaining independent or becoming directly employed by Northwest's Affinity practice after it fully merged with the hospital. Itasca-based Integrated Healthcare and other doctor groups held meetings to discuss the impact on their practices and livelihoods in a changing health care industry.

These doctors, like other doctor groups, were considered affiliated or "on staff" with Northwest.

Some doctors had said the cons of direct employment by a hospital included selling a practice and losing independence, following a new set of policies and procedures, changing salaries impacted by reimbursements and expenses, and growing pressure to produce more billable hours or more revenue. Other doctors had said the pros include working a set number of hours for a known salary, allowing the hospital to do all the marketing, and accessing more resources and equipment.

Northwest's Chief Executive Officer Bruce Crowther had said employment of doctors directly by the hospital provides an all-inclusive delivery of health care, with incentives to grow internally and more resources to ultimately help patients. The payment system will ultimately drive out the one- or two-doctor practices, he said in April.

"Their days are numbered, especially over the next five years," Crowther said about solo practitioners.

Crowther also believes the direct employment of doctors provides a better patient experience, with access to multiple physicians, specialties and services, and a more personalized, coordinated system of care.

The exact number of Illinois hospitals that employ doctors, instead of having them affiliated, has yet to be tracked by medical associations. But it has been a growing trend in recent years and is expected to continue under health care reform, said Illinois Hospital Association spokesman Danny Chun.

Hospitals want to more closely integrate physicians and the push to transform the delivery of health care with things like bundling of payments, so-called accountable care organizations, and medical homes, Chun had said. Accountable care organizations are associations of hospitals, physicians and all others under one corporation that takes one payment for services from insurance companies and divides it in-house.

Illinois ranks among the top three states with the highest medical liability insurance premiums in the country in many specialties such as ob/gyn and internal medicine. Hospitals sometimes help pay off the school loans of doctors they employ and many will cover or pay for their employed physicians' medical liability insurance premiums, Chun said.