Dive Brief:
- Intermountain-owned Saltzer Health said it will shut down if it cannot find a buyer by March 29, citing financial and economic challenges.
- The physician group said it’s in active negotiations with healthcare companies over the sale of some operations, and is “optimistic that a sale can be achieved,” according to a Thursday news release.
- The health group, which is owned by Salt Lake City-based Intermountain Health, employs 450 people and serves approximately 100,000 annual patients across 11 Treasure Valley locations, according to a company spokesperson.
Dive Insight:
Saltzer Health, which was founded in 1961, has changed hands several times over recent years and typically expanded with each acquisition.
Change Healthcare bought Saltzer in 2017, after a merger between Saltzer and regional health system St. Luke’s Health was challenged by the Federal Trade Commission. Two years later, development firm Ball Ventures Ahlquist acquired the health group.
Saltzer expanded under BVA, adding four more urgent care clinics to its portfolio and nearly doubling providers on payroll, according to a report from the Idaho Business Review.
BVA then sold the group to Intermountain in 2020, citing better business model congruity between nonprofit Intermountain and Saltzer.
However, Saltzer is now at risk of closing after costs climbed and revenues failed to meet expectations, according to a company spokesperson.
“Like many health systems across the country, Saltzer has faced significant financial pressures as the rising cost of providing care, driven by inflation, has increased since the pandemic,” Saltzer wrote in its announcement. “Saltzer leaders say vital contracts and other market relationships did not progress as had been hoped for, making it financially challenging.”
The company has already cut services in a bid for efficiency. Last year, the medical group discontinued walk-in urgent care at most of its clinics in Ada and Canyon counties and laid off approximately 67 employees. The company said they cut services with low utilization rates, including ambulance transport services and the group’s physical therapy program, to redirect funds toward primary care offerings.
A Saltzer spokesperson declined to comment on what types of healthcare organizations are involved in its current purchase discussions.
Experts told Healthcare Dive this year that outpatient services, such as urgent care facilities, may be an attractive investment opportunity for health systems in 2024 as a strategy to increase market share and generate revenue at relatively low cost.
Intermountain reported $157 million in operating income for the first nine months of 2023 — a 45% decrease from the prior-year period.
