DuPage Medical nears deal to expand into Indiana

The largest independent physicians groups in Illinois and Indiana have signed a letter of intent to partner, creating a “hub for regional expansion.”

DuPage Medical Group said this week it’s set to “purchase the assets” of The South Bend Clinic.

DuPage Medical declined to provide further details on how the partnership will be structured, noting that the deal is still being finalized.

The agreement marks DuPage Medical’s first out-of-state expansion since launching in 1999.

Snapping up physicians groups across suburban Chicago, DuPage Medical has assembled a local powerhouse over the years with 800 doctors and net revenue of $1 billion. But pressure is rising on independent physicians groups as hospital chains, health insurers and national retailers elbow into their business.

The addition of South Bend’s nearly 170 clinicians across 11 clinics—located near the Michiana border—would allow DuPage Medical to bulk up while remaining independent.

The timing won’t surprise industry observers. Many doctors saw revenues decline early in the COVID-19 pandemic as patients avoided care for fear of infection. DuPage Medical’s model provides struggling practices with an opportunity to remain independent while taking advantage of the reimbursement rates, technology and data capabilities of a larger organization.

It’s unclear whether South Bend’s accountable care organization, which manages roughly 7,000 Medicare beneficiaries, is part of the deal. But advancing “value-based care” is among goals included in DuPage Medical’s statement this week.

“This first-of-its-kind agreement will allow us to serve more patients and communities and address their needs by delivering the most progressive care possible,” DuPage Medical CEO Steve Nelson said in the statement.

Kelly Macken-Marble continue in her role as CEO of South Bend, in addition to serving as regional CEO within the suburban Chicago group, with a focus on additional growth opportunities, the statement says.

Los Angeles-based Ares Management invested $1 billion in DuPage Medical in 2017.