Concentra buys most of a Mercy health program

Firm adds to dominance in occupational medicine

February 02, 1999|By M. William Salganik | M. William Salganik,SUN STAFF

Concentra Medical Centers announced yesterday that it is buying most of the business health program of Mercy Medical Center, further consolidating its position as the largest occupational medicine provider in the Baltimore area.

Financial terms were not disclosed.

Mercy will continue its contract to provide occupational health services to the Baltimore police and fire departments. Concentra will serve Mercy's other clients, and will close small centers Mercy had in Towson and Brooklyn Park.

Concentra will also help Mercy manage its remaining occupational health business, providing help in such areas as information systems and billing. And Concentra will refer some patients to Mercy, which will maintain a 24-hour service at its downtown Baltimore hospital.

This marks further consolidation in the occupational health market, said Dr. Edward Bernacki, chief of occupational medicine at Johns Hopkins, "bringing it down to ourselves and Concentra."

Tom Ward, Concentra's regional vice president, estimated that his firm has about a 35 percent market share in the Baltimore area.

Most occupational health business is still served by emergency rooms, urgent care centers and doctors in general practice. Concentra entered the Baltimore region about three years ago by paying about $10 million to acquire three private occupational medicine businesses, operating eight clinics.

The company -- which operates 10 centers in Maryland and 156 nationally in 24 states -- has recently done several joint ventures with hospitals to enter markets, including one last month in Reading and Lancaster, Pa. Ward said the Mercy deal is different in that it is essentially an acquisition.

He said Mercy's business would increase Concentra's market share by "a couple of percentage points." The company was more interested, however, in Mercy's contracts with hospitals and other providers outside the Baltimore area, which will allow Concentra to serve patients in areas such as Easton and Cumberland, where it does not have enough clients to maintain its own center.

Sister Helen Amos, chief executive officer of Mercy, said, "We wanted to partner with them. What they bring to the book of business we had is a state-of-the-art information system and marketing ability. We have been proud of our services, but impressed with the fact that running the business of occupational medicine is quite different from running a hospital."

Dr. James Levy, director of the Mercy program, said, "We were making money, but the margins were very small." The program needed to grow to thrive, he said, and that would have taken a larger investment.

Mercy's occupational health staff will drop from 38 to 14. Levy said no one would be laid off, with all staff offered positions with Concentra or jobs in other Mercy departments. Mercy's Towson center will close when Concentra opens a larger one in July.

Ward, the Concentra vice president, said it had also acquired a small occupational medicine practice from Doctor's Hospital in Lanham.

Pub Date: 2/02/99

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