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October 25, 2017

Dignity Health, Select Medical to merge urgent care businesses

Daily Briefing

    Dignity Health and Select Medical on Monday announced plans to merge their urgent care businesses in an effort to better align care delivery, Alex Kacik writes for Modern Healthcare.

    About the companies

    Dignity is one of the largest not-for-profit providers in the United States, overseeing operations for more than 400 care centers, including 39 hospitals, in 22 states. Dignity's urgent care subsidiary, U.S. HealthWorks, operates about 250 clinics in 21 states.

    Select Medical is one of the largest specialty hospital and outpatient rehabilitation clinic operators in the United States, overseeing operations for 102 long-term acute-care hospitals and 21 acute rehab hospitals across 28 states. Select's joint venture subsidiary, Concentra Group Holdings, operates 315 occupational health centers in 38 states.

    The merger

    Under the definitive agreement announced Monday, Dignity's U.S. HealthWorks will merge with Select's Concentra. Dignity will own a 20 percent equity interest in the merged company, which is valued at $238 million. Concentra will redeem its currently outstanding equity interests in an effort to maintain a majority voting interest in the company.

    The merger, which subject to regulatory approval, is expected to close at the end of the first quarter of 2018. According to a news release, the merger builds upon a partnership between Dignity and Select in which the two companies joined to build a 60-bed acute inpatient rehabilitation hospital near Las Vegas that is expected to open in 2019.

    Select co-founder and Executive Chair Robert Ortenzio said the partnership "enables us to join forces and deliver best-in-class occupational medicine and urgent care to communities and corporate work sites nationwide."

    Dignity Senior Executive VP and CFO Daniel Morissette said, "Caring for America's workforce creates a healthier population which means more productivity for business, a stronger economy, and connected communities." He added, "Combining the two organizations will strengthen the delivery of clinical care, standardize best practices and improve service for employers and employees" (Kacik, Modern Healthcare, 10/23; Dignity Health release, 10/23).

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