The University of Utah will acquire eight clinics and an administration building from MedPartners Inc., in a deal worth between $35 million and $36 million.
In doing so, the U. will create the University of Utah Health Network.The U. Board of Trustees approved the transaction in a meeting early Tuesday.
The acquisition includes five medical facilities in Salt Lake, Midvale, Ogden, Orem and West Valley City known as Talbert Medical Group clinics; an administration building at 35 W. Broadway and leasehold interest in two clinics at 1151 E. 3900 South in Salt Lake City and another clinic at 2132 N. 1700 West in Layton.
Five of the facilities are owned by PacifiCare of Utah Inc., and four are owned by unrelated third parties.
U. President J. Bernard Machen said no taxpayer money will be spent nor will funds be borrowed to acquire the facilities, which medical center officials believe will bolster University Hospital's presence as a primary care provider.
The clinics and administration building will be purchased using U. Health Sciences Center reserves.
Approximately $16 million will go to MedPartners to buy the Talbert Medical Group. Approximately $19 million will be paid to PacifiCare to buy facilities.
Machen said the additional access points will enhance the U.'s position in the medical market as well as provide more training opportunities for medical, nursing and health students that can be directly supervised by the U.
Dr. Randall Olson, chairman of the U. Faculty Practice Organization, said trends in the health care industry portend that in the near future up to half of medical school graduates will work in primary care settings.
"We we want to assure patients, physicians and employees of Talbert Medical Group in Utah that they be welcome in the University of Utah Health Network," Olson said.
"We do not plan any major changes in the operation of the group."
Jim Jardine, chairman of the U. Board of Trustees, called the transaction "a step in the right direction," noting the U. would not have attempted such an acquisition 20 years ago.
"In our view, the greater risk was doing nothing," Jardine said, referring to the competitive nature of the health care industry.
"It's up to you who brought this proposal to make it work."
The Talbert Medical Group was created in December 1995 when FHP spun off its 57 medical centers in the West. It formed PacifiCare, which continues to own the buildings. MedPartners acquired Talbert in September 1997.
Some 650 employees of the affected clinics and administration facilities will become U. employees, although they will remain MedPartners employees for the first 90 days of the purchase.
PacifiCare is attempting to sell its health insurance business in Utah. If that does not occur by the time the acquisition is finalized, PacifiCare will continue to operate from its administration building at 35 W. Broadway. If necessary, the administration building will be dropped from the package and the price adjusted accordingly.
Otherwise, the acquisition should be wrapped up this fall. A firm purchase price will be determined once the parties conduct an equipment and facilities inventory.
MedPartners' dental business is not part of the package.
The Utah State Board of Regents has to approve the deal. The regents are scheduled to act on the agreement Friday during a meeting at Snow College in Ephraim.
"It was a little less of a surprise than we thought it would be last Thursday or Friday," said Jardine, referring to a front-page Saturday Deseret News article about the planned acquisition.
Combined with the 40 specialty clinics housed at U. Hospital, the new network will provide more than 800,000 outpatient visits per year.
The acquistion will result in a network of 14 outpatient health centers along the Wasatch Front and in Summit County. About 70 percent of Wasatch Front residents live within a 15-minute drive from these facilities.