Supergroup: Consolidating pediatric practices while maintaining autonomy

Case Study - January 14, 2019

Partnerships, Mergers & Acquisitions

Practice Efficiency

An idea was born during a 2011 member meeting of the Chicago-based Children’s Community Physicians Association, an independent physician association (IPA) affiliated with Lurie Children’s Hospital of Chicago, one of the nation’s leading pediatric providers. Some of the pediatricians wondered how clinical and financial integration of their practices could provide stability going forward. 
 
In 2012, based on a pro forma done by an outside accounting firm on financials and economies of scale, seven of the pediatric practices decided to come together to form a supergroup. As Kathleen McTigue, MBA, chief executive officer, PediaTrust, LLC, Northbrook, Ill., recalls, the practice owners were being proactive in a changing market: “The health systems were purchasing practices, not necessarily pediatric practices, but they were seeing their colleagues — the internal medicine doctors, the specialists or their own doctors — become employees and they wanted to stay independent,” she says. “So that was really the impetus for merging their businesses.”
 
At the time they went live on Jan. 1, 2013, PediaTrust consisted of 40 providers and 170 staff members in 12 locations. During the next six years, the group expanded considerably, while becoming a financially integrated entity.

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