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May 1, 2017

After May 9 vote, Reliant could be sold

PHOTO/NATHAN FISKE Tarek Elsawy took over as Reliant's leader in January 2016, coming from the Cleveland Clinic in Ohio.

The largest independent physician practice in Central Massachusetts – Reliant Medical Group in Worcester – will decide May 9 whether to be acquired by a division of $185-billion healthcare conglomerate UnitedHealth Group, said sources familiar with the situation.

Reliant doctors have been telling people in the healthcare community the company with 2,500 employees and $677.5 million in annual revenue will soon be part of a much larger organization. One anonymous source said Reliant doctors are saying the company to purchase Reliant will be OptumHealth, a Minnesota-based division of national insurer and health management firm UnitedHealth Group.

“Reliant regularly explores strategic partnerships that have the potential to enhance the services we provide to our patients,” Reliant spokesman Michael Masseur wrote in an email after being asked about the acquisition.

The Reliant board of trustees is scheduled to meet on May 9 to vote on the acquisition proposal, according to a company spokeswoman.

Optum did not respond to requests for comment.

Financial turnaround

One of the the top 10 largest Central Massachusetts employers, Reliant Medical Group acquired Southboro Medical Group in 2015, making the organization the region's largest independent physician practice. Reliant was previously part of the Atrius Health Network in Auburndale from 2011 to 2014, but broke off that arrangement to merge with Southboro.

Reliant employs more than 500 providers, and cares for more than 320,000 patients. It has $146.6 million in assets, according to its 990 filing with the Internal Revenue Service.

Reliant ended 2015 with an operating loss of $9.7 million, but in 2016, under the direction of new CEO Tarek Elsawy, Reliant turned around and aimed to end the year with a $15.5-million operating surplus.

Reliant has deep roots in Worcester. It was formerly known as Fallon Clinic, under the same organization as insurer Fallon Health, but Reliant formed a separate nonprofit after splitting from Fallon in 2004. Fallon Clinic was founded in 1929, making Reliant the region's first group medical practice, according to its website.

A corporate synergy

In 2016, Reliant had $677.5 million in revenue. Optum had $1.3 billion in revenue in the first quarter 2017.

Optum is a technology and a pharmaceutical benefits firm, but the UnitedHealth division has begun buying clinics and doctors' offices to partner with UnitedHealth's insurance division, as policymakers are pushing for providers and insurers to form accountable care organizations to curb medical costs.

Staff Writer Laura Finaldi contributed to this report.

CORRECTION: A previous version of this article incorrectly stated that Fallon Health and Reliant became independent from one another in 2011, when the two actually separated in 2004. 

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