GVH to acquire Gunnison Valley Family Physicians

Gunnison Valley Health is in the process of purchasing Gunnison Valley Family Physicians (GVFP), the city’s last traditional, independent primary care provider. While the acquisition had been previously considered for 2025, mounting pressures on the clinic forced an accelerated timeline that will conclude in the coming weeks, once negotiations are complete.

GVFP, a primary care provider located on Virginia Avenue, has offered comprehensive medical services to thousands of valley residents for more than eight decades. This includes sports medicine, obstetrics, pediatrics, immunizations, newborn care and more. The office contains six providers, five who are partners with equal ownership stakes in the business, and one nurse practitioner.

The practice has shouldered years of compounded costs from delayed insurance reimbursements, new electronic health record software and the loss of several physicians assistants and doctors to retirement. Facing the possibility of closure, the practice started negotiations with GVH, said Practice Manager Marsha Thorson.

“It touched a lot of generations, delivered generations of patients here in the valley,” Thorson said. “So there's definitely mixed emotions with everything that is happening, because we've been independent for 82 years. It's not been easy.”

The deal should be finalized by the end of the month, said hospital CEO Jason Amrich. GVFP will continue operating as a private practice through Sept. 30, and reopen under the GVH banner in the first week of October. GVFP’s phone numbers will remain live to avoid confusion. All existing patient medical records will transfer over to GVH.

Patients can continue to receive care and see their existing providers at GVFP’s current location, 130 E. Virginia Ave. GVH is purchasing the business and leasing the building. The GVH board is planning to build a medical services building in north Gunnison, which could house primary care offices.

Currently, GVFP is equally owned by the five physicians and member-partners: Jay McMurren, Lauretta Garren, Eric Thorson, Laura Villanueva and Megan Tucker. GVH had the practice valued by a third party and is in negotiations over a final price for the business. Through an asset purchase agreement, the partners will sell their stake in the business and become GVH employees.

The practice will be integrated into the GVH Family Medicine Department, its primary care system. According to Amrich, the purchase ensures that GVFP physicians have the option to keep practicing in the Gunnison Valley, sustain a local network of primary care providers and offer quicker continuity for referrals, labs and other testing.

“We feel pretty lucky to bring in an organization like GVFP with eight decades of experience and longstanding in the community, into GVH,” Amrich said. “We recognize just how hard it is to operate health care, and so if we can provide that landing spot and continue that access for the community, that's basically a win-win for everybody.”

A litany of hardships

GVFP opened in 1942, in the era of the American country doctor. These doctors traveled around the valley to deliver babies, conduct routine check-ups and even respond to emergency calls. Over the years, the practice grew to serve the valley’s expanding population, adjusting to the advent of public health care (Medicare and Medicaid) in the 60s and decades later, private health care.

In time, distinctions between private and public insurance have been obscured or fallen away completely. Commercial insurers entered the public health care sector with programs like Medicare Advantage. The industry-wide cross pollination has made dealing with insurance increasingly complex, Thorson said. Then, the advent of the Affordable Care Act in 2014 further obfuscated the picture. GVFP outsourced its billing in 2021, in part due to the growing convolution in the insurance landscape — a significant expense added to the books.

“Our hands are tied, and we're trying to participate in that American health care system, working with the different insurance [companies] and we can't control what their insurance does,” she said. “That's very challenging.”

Payments from insurers are unpredictable, Thorson said. Contracts between insurers and providers, called fee schedules, determine how much the insurer pays for each medical service. These contracts are rife with uncertainty and make it hard for providers to know how much or when they’ll be paid. Reimbursements vary based on insurer, policy and specific plan details (deductible, co-pay, etc).

Some of GVFP’s insurer fee schedules are 10-15 years old. The task of reworking these contracts requires precious time the few clinic staff don’t have, she said. And, small rural clinics reworking a fee schedule with major insurers like United HealthCare, Aetna or Anthem Blue Cross Blue Shield is not a negotiation.

“That's the term that's used, but that's really not how it works,” Thorson said. “We've never been able to say, ‘Oh no, we need this’ and it’s a back and forth. They tell us what they're going to do, if anything … We have no leverage.”

And, the lag time between a patient visit and insurance companies’ payments to the clinic could be months, or even years, Thorson said. The practice was also penalized by insurance companies for not meeting their reporting metrics, due to GVFP’s old electronic health care software which limited staff’s ability to pull data. The result? Financial penalties.

The practice dealt for years with an antiquated electronic health record (EHR) system, software that contains digital records of a patient’s medical history. Before 2022, the practice’s system was over 20 years old. That year, the federal government decided that the program no longer met security standards, and mandated an update. The new EHR, with new layers of security and data reporting, and hardware updates cost the practice $100,000, Thorson said.

The hard knocks continued with the pandemic, which not only permanently inflated the clinic’s supply costs, but hiked up the cost of living for all Gunnison Valley workers as second homeowners purchased up valley real estate. Then, in February of 2022, the practice’s former office manager Barbara Helen Rider was indicted by a grand jury for embezzling just under $900,000 from the GVFP over the near-15 years of her employment

In August of that year, she pled guilty to felony theft and felony tax evasion and was sentenced to six years of supervised probation. She was ordered to pay $886,000 in restitution, but has only paid $150,000 back so far. The practice never recovered.

“It's incomprehensible. You can't really convey the level of damage it does to a business. Five years later, we are still dealing with [and] recovering from that incident,” Thorson said.

A community-focused deal

The two health care providers have been collaborators for years, from GVFP physician Jay McMurren taking shifts in GVH’s emergency department to the clinic’s physicians referring patients to the hospital’s imaging, blood testing and specialists.

The providers’ leaders previously considered whether joining together would make the valley’s health care landscape more resilient by devising more unified primary care, Amrich said. They planned a possible acquisition for sometime in the fall of 2025, occurring after GVH onboarded its new electronic health record system, Epic.

But the outcome of this years-long, small-town cooperation hit home when GVFP lost two PAs, one doctor left on maternity leave and several other staff and physicians retired between 2022-2024. With fewer doctors to bring in paying patients, the financial picture dimmed. The shortage, on top of accruing expenses, proved to be one burden too many for the clinic. Facing the prospect of shutting down, and further constraining the valley’s tenuous primary care landscape, the clinic started negotiations with GVH.

​​“We are thrilled that we don't have to just close our doors and leave and leave our patients without care,” Thorson said.

Now, under the banner of the larger hospital, the GVFP team can focus on providing care while the increasingly complicated task of managing insurance reimbursements, billing and facility upkeep is absorbed, Amrich said. GVH, as an isolated rural hospital, faces the same slew of financial pressures — inflating materials costs, recruiting challenges and poor reimbursement from commercial or federal insurers. But its infrastructure is larger, so, for now, it can shoulder these burdens.

This is not the first time GVH has stepped in to help private businesses with imperiled finances sustain these services in the Gunnison Valley. In February of this year, GVH brought in a nonprofit provider to take over Gunnison’s child care center, Wonderland Nature School, after it weathered years of financial hardship.

“I think about access to health care beyond even GVH-native walls, and I really wanted to make sure that the patients for GVFP had a place to go for the long term, for stability. We wanted to make sure the providers had that sense of stability,” Amrich said. “So we felt almost duty-bound to ensure that there was adequate access to primary care going forward.”

The acquisition means that all traditional, full-scale primary care in Gunnison (outside of a few non-Western medicine providers) now exists under one organization. The consolidation of care across the valley under GVH — it acquired a Vail-Summit Orthopaedics and Neurosurgery clinic earlier this year — means that most residents, when selecting care, are faced with fewer choices.

Outside county borders, behemoth corporations like Walmart, Amazon, CVS and private equity firms are snatching up large health care companies, only to divest parts of the businesses years later at the behest of profit-focused shareholders. But GVH, a nonprofit, county-owned hospital whose CEO answers to a seven-person board, has no shareholders. The amount it can raise rates (to both commercial and government payers) is capped. That’s on top of having no control over how insurance companies determine patient’s premiums, copays and deductibles.

“It's actually a luxury on their [private equity firms and corporations] end that they can say, ‘Hey, we're going to solve health care's problems,’ and then they realize how hard it is and they divest,” Amrich said. “We, as a county owned community hospital, don't have that luxury. We have to exist for now and then decades into the future. Our commitment to serving the community is as real as it gets.”

(Abby Harrison can be contacted at 970.641.1414 or abby@gunnisontimes.com.)