In today’s healthcare environment, many small independently owned medical clinics are at a crossroads, facing a choice between two vastly different business models. Choose one route, and they’ll maintain independence amid mounting risk, shrinking margins, and increasingly complex payer contracts. Choose another, and they’ll join a large health network, buffering risk and boosting compensation while losing their founders’ institutional knowledge and local roots.
But last year, Woodcreek Healthcare found a third path—one that enabled it to address the needs of its practitioners, owners, administrators, and patients. Founded in 1979 in the rolling hills of the Puget Sound, Woodcreek grew over time to three clinics and two urgent-care locations in and around Puyallup, Washington. As Woodcreek Healthcare incorporated urgent care, behavioral health, asthma care, and allergy care, local demand for its services grew.
In addition, a shift to value-based provider contracts meant that administrators had to sync performance metrics across increasingly diverse payer standards. Providers faced burgeoning patient panels and stagnant compensation, while the practice’s owners absorbed ever-growing financial risk.
The solution was a new type of partnership, formed when Woodcreek Healthcare joined Mary Bridge Children’s Hospital and Health Network on January 1, 2018. Now called Woodcreek Pediatrics by Mary Bridge Children’s, the clinic’s nearly 40 providers became employees of Mary Bridge and the MultiCare Health System, nearly doubling the number of general pediatric providers in the network.
The critical employees supporting front-line providers opted to remain independent, forming management-services organization Woodcreek Provider Services LLC. The MSO now employs Woodcreek Pediatrics’ nearly 130 clinical and administrative support staff and operates under a contract with MultiCare.
This unique hybrid model pairs independence and partnership, effectively capturing the benefits of both, says Woodcreek Provider Services CEO James Hudson. “For providers, joining a larger organization means they can benefit from economies of scale and secure better contracts,” he says. “The day-to-day work of our providers has not changed, but they’re being better compensated for what they do.”
A SEAMLESS TRANSITION
The transition has been similarly seamless from the administrative side, Hudson says. Aside from adjusting the clinic’s fee structure to match that of Mary Bridge, the administrative work hasn’t changed. In fact, patients might not even be aware that their longtime Woodcreek physician is now employed by one of the region’s largest health systems.
Hudson notes, though, that even if patients don’t notice a change, they still benefit from the partnership. “For one thing, we’re now able to accept a larger array of insurance products than before,” he says. “Our services are now covered by a robust MultiCare network.”
Woodcreek’s partnership with Mary Bridge Hospital was a win for the practice’s owners, practitioners, support staff, and patients, says Hudson. “Owners face incredible entrepreneurial risk as margins get smaller and smaller. Joining a larger organization is a natural safe harbor for owners to steer into, and that’s what we’re seeing in the market. As a business manager, I know we’re now providing better and more coordinated care with a stronger bottom line.”