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Official: Purchase of Reese practice is not a signal of policy change at MWHC


Mary Washington Healthcare is studying possible mergers with local physician groups under the Affordable Care Act, but that possibility was not the reason for its purchase this month of Reese Medical Associates, a hospital official said.

The merger was not meant as a preview of the future under the federal reform legislation, said Walt Kiwall, Mary Washington’s executive vice president and chief operating officer. Rather, it was a unique opportunity, a personal decision by Dr. W. Andrew Reese to sell his 10-year-old practice, Kiwall said.

“We have not made it a practice to go out and purchase primary-care practices, but if practices are interested in speaking with us about that, we’re interested in speaking with them,” Kiwall said.

The 2010 Affordable Care Act encourages the merger of hospitals and physician practices. The federal legislation says that if hospitals, clinics and doctors work in teams to lower costs and keep patients healthy, they can share in the savings.

Kiwall said Mary Washington is studying how it might form these alliances but is not ready to do so.

“We like many health systems in the country are looking at integrated provider networks,” he said. “We’re still developing the whole initiative.”

Reese approached hospital officials several months ago about a possible merger. The result was the Jan. 1 sale of Reese Medical Associates, his Spotsylvania County business.

Four physicians, two physician assistants and 22 staff members at Reese are now Mary Washington employees. The two practice locations hosted about 25,000 patient-visits a year.

Reese said last week that the Affordable Care Act was one of two factors in his decision to sell his practice. He said he also was motivated by the confluence of declining reimbursements, increasing regulation and rising costs.

“Before you know it, your overhead is just so high that the numbers don’t work anymore,” he said.

Reese said more mergers are coming since the reform legislation “encourages hospitals and physician groups to form stronger relationships than just the typical referral relationships that doctors usually have.”

He added, “The angle is going to be maintaining patient health, rather than just treating people who are sick.”

Mary Washington owns 14 specialty physician practices. Reese Medical Associates is its third primary-care practice.

The sale did not include the real estate at Reese’s offices. Reese retains ownership of the property at 10620 Spotsylvania Avenue and at 4535 Spotsylvania Parkway. Mary Washington will lease the office space from Reese, Kiwall said.

One of Reese’s offices is located across from the entrance to the Spotsylvania Regional Medical Center, and the other is near the Spotsylvania hospital. Reese and his colleagues have clinical privileges at Spotsylvania Regional, and Kiwall said he expects them to retain those privileges.

“We don’t have any issue with that,” he said. “There are things that they may need to have done there because of proximity.”

The doctors also won’t be expected to automatically refer patients to Mary Washington Hospital or to the specialty practices owned by Mary Washington, he said.

“We expect them to continue doing the referrals that work best for them,” Kiwall said.

Jim Hall: 540/374-5433