EPM: Obviously TeamHealth has been a major leader in emergency medicine for decades. Give us a really brief history of TeamHealth and help us understand how that small group in Tennessee became a billion dollar company.
Lynn Massingale: The short version is that a couple of doctors got our first contract in 1980 – two contracts in Tennessee, which we’re proud to say we still have. We grew locally within the region, literally a two-hour circle in the car for ten years and got one or two contracts a year. Then we drew a two-hour circle in a 40-year-old single engine airplane that I flew and we grew a little faster for the next five years. And then we decided to try to create a national group. We visited with what I thought were some of the best groups in the country. The goal was if we could bring those groups together and share each other’s best practices and administrative practices, that we would get better, smarter, faster than if we continued to go it alone. That resulted in the creation of TeamHealth in the mid-90’s. Throughout our history [we’ve experienced] double-digit growth. We’ve had a couple different capital structures. We’ve had private equity investment once before and we have that again now, as you know, with Blackstone. And then we were public for seven years, ending literally a week ago this past Monday.
EPM: Tell me about TeamHealth’s expanded scope of practice.
Massingale: We started as an emergency physician group until a local hospital said “we have an increasing number of ER unattached patients. We have a declining number of primary care medical staff members willing to take care of those patients when they need admission. Would you please create a group to admit those hospitalized patients and take care of them and then send them back into the community to some community-based physician for outpatient follow-up?” The administrator didn’t know the word hospitalist. So we now have a very big presence in hospital medicine through the IPC acquisition. On a much more limited basis we provide some general surgery, some trauma surgery, some orthopedic surgery, all hospital-based and a fair number of laborists. We have a pretty sizeable division that provides healthcare employees to the military, active duty military bases and clinics. And then we have a number of Urgent Care clinics and a nurse call center. But the biggest piece – 75 or 80 percent – is still emergency medicine. The second biggest piece is hospital medicine.
EPM: What does it say about TeamHealth’s future that Blackstone would be willing to invest over $6 billion to acquire?
Massingale: I think what I learned about Blackstone years ago when I talked to CEOs at several public companies was that Blackstone tends to pick industries that they think have a bright future. They pick management teams that they have conviction in and they get behind those teams. I think they view healthcare as a place that’s very dynamic and a place of a lot of opportunity. And frankly, I think it says that they view physician services to be an important part of the market.
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