BCBS of Minnesota buys joint ownership of hospital's 20 clinics

Minneapolis-based North Memorial Health and Blue Cross and Blue Shield of Minnesota signed a joint venture agreement to become shared owners of North Memorial's clinics.

Under the joint venture, announced June 24, BCBS' parent company, Stella, will purchase a 49 percent ownership in North Memorial's 20 clinics. North Memorial will retain 51 percent ownership of the joint venture.

The transaction, which will be implemented in 2020, was spearheaded by the physician CEOs of both organizations: BCBS of Minnesota's Craig Samitt, MD, and North Memorial's J. Kevin Croston, MD.

"Healthcare costs too much, and it is too often difficult for people to understand and navigate. With this joint venture, we're removing confusion from the equation," Dr. Samitt said in a press release. "Blue Cross and North Memorial Health have come together to transform healthcare in Minnesota in a way that no others have, and the winner will be the consumer."

The business that will run the 20 primary and specialty care clinics will be seperate from both parent organizations. A newly created CEO position and board of directors will manage the clinics. Jennifer Close, president and chief ambulatory officer at North Memorial, will serve as the joint venture's CEO.

The shared ownership structure aims to lower the overall cost of care by up to 20 percent over five years through value-based payments that focus on wellness, prevention and health outcomes over consumption, according to the organizations.

"Incremental change has been holding the healthcare industry back for too long. The industry is moving too slow, so we are taking bold action to create a transformative solution that is consumer friendly, improves the quality of care and delivers outcomes that are measurably better than others," Dr. Croston said in a prepared statement. "It is our mission to deliver this change with and for the communities we serve by keeping the healthcare consumer at the center of everything we do."

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