health care giant buys out doctor-owned Corvallis Clinic

Optum Oregon, a subsidiary of the Minnetonka, Minnesota-based multinational corporation UnitedHealth Group, stated in a Dec. 28, public notice that the company will buy out shareholders and merge with the Corvallis Clinic.

Staff didn’t say how many patients the clinic serves, but the clinic lists more than 100 health care providers on its website. It has branches in Albany and Corvallis with a location in each Lebanon, Lincoln City and Newport.

Representatives from the Corvallis Clinic did not return an email, two voicemails and several phone calls placed between Dec. 20 and Jan. 5, seeking comment.

Optum Oregon says it’ll make changes to Corvallis Clinic but will try to “ensure limited disruption to patient care,” according to a redacted notice filed with the state’s health care regulator, Oregon Health Authority.

Details like projected revenue and closing costs were not revealed in the document, protected as trade secrets under an exemption in Oregon’s public records law.

The merger needs regulatory approval.

An Optum spokesperson said in an emailed statement the company will increase access to affordable health care in the area.

“We are excited to be coming together to expand upon the exceptional health care services provided by the Corvallis Clinic to patients in the Willamette Valley,” Nick Di Archangel said.

A longtime affordable health proponent in Benton County said he worries the buyout will shift control of local health care services from owners who live in Corvallis to a faraway private equity giant in the middle of a nationwide grab.

“It removes local control over vital health services,” said Mike Huntington, vice-chair of the Mid-Valley Health Care Advocates.

Optum began expanding its business into Oregon in 2020, when it bought a Eugene health care provider, Oregon Medical Group. It next purchased GreenField Health, a clinic network in the Portland area, in 2021.

The Corvallis Clinic’s 11 sites, mostly in the mid-Willamette Valley, will operate under Optum’s control, according to the public notice OHA published.

In the notice, the limited liability company said it will standardize the practice with its other Oregon holdings, “to identify opportunities for alignment with Optum Oregon’s operational standards.”

Optum likely will pay for more marketing, newer equipment and staffing up The Corvallis Clinic with more health care providers, according to the notice.

Optum stated clinic physician-owners took a 15% cut in their compensation. And The Corvallis Clinic projects it will lose money over the next 12 months, according to the notice.

Optum stated it’ll retain health care providers who can pass a background check. The notice does not say what will happen to employees who are not health care or medical providers.

The Corvallis Clinic will remain a tax-exempt nonprofit corporation, according to the notice.

The move comes as critics level complaints at the insurance giant. UnitedHealth is publicly traded and employs around 70,000 physicians through the Optum subsidiary.

Last year, Samaritan dropped its contract with the insurance company and effectively left about 18,000 customers, mostly in the mid-Willamette Valley, without coverage.

“I am a believer in nonprofit, locally governed health care. The Corvallis Clinic has been a valued partner operating in the mid-Willamette Valley for more than 75 years, and the prospect of it no longer being locally owned saddens me,” Doug Boysen, CEO of Samaritan Health Services, said in an emailed statement forwarded by a spokesperson.

Increasingly, clinics, private practices and specialty care facilities belong to private investors. The Corvallis Clinic was like most doctor’s offices until somewhat recent history — relatively small practices owned by the doctors who work there.

As many as seven in 10 of all U.S. physicians were employed by a corporation or hospital system by 2021, according to a study by the Physicians Advocacy Institute.

And the people who try to push legislators for widely available, low-cost health care are worried.

Oregon’s legislature has made some effort to limit corporate control over health care in the state. But nationwide, there’s a rush to consolidate and concentrate ownership of doctors’ offices.

Private equity firms, insurance companies and hospital systems turned their money toward physicians in the 2010s.

A 2023 study from the American Antitrust Institute reported that private equity firms are in a sort-of rush for health care providers. The number of deals each year rose from 75 in 2012 to 484 in 2021 — a sixfold increase.

The study focused on private equity “roll ups” of physician practices, in which investors buy up several doctor groups in a city.

The goal of private equity firms is to exit the market in a few years with a profit, selling their clinic networks to larger equity firms. But the local effects of nationwide investment are similar for insurance companies like UnitedHealth.

Steeper prices usually follow the buyouts, according to the study.

“They purchased a clinic that is struggling,” Huntington said.

Oregon Health Authority will consider public input before deciding whether to allow the merger. The agency is taking public comment on Optum’s proposed buyout until Jan. 18.

Anyone can comment by including the word Optum in an email to Oregon Health Authority, hcmo.info@oha.oregon.gov.