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Mosaic selling local clinics to St. Luke's
Doctor says Mosaic misjudged the market

12-27-17

by Ivan Foley
Landmark editor

There will soon be new owners of a couple of medical clinics in Platte County.

Mosaic Life Care clinics located in Platte City and in Parkville are being sold by Mosaic to St. Luke’s Health System.

The ownership change is scheduled to take place in April. St. Luke’s is acquiring the health professionals and office staff at each of the facilities it is purchasing from Mosaic, so it seems likely staffing at the clinics will remain in place, at least for now.

In addition to the Platte City and Parkville Mosaic Life Care Clinics, St. Luke’s is also purchasing Mosaic clinics located in Clay County at Highland Plaza in Kansas City, Smithville, Burlington and Shoal Creek.

The sale price has not been disclosed.

Clinics in Excelsior Springs and Kearney will remain part of Mosaic Life Care, officials have said.

St. Luke’s officials have indicated this is part of their effort to increase St. Luke’s presence in the area market.

Mosaic has said it will refocus on its 41-county rural service area centered in St. Joseph, where it operates a hospital. Hospital officials have been planning a relocation and expansion of Mosaic’s intensive care unit, renovation of the birthing center facilities, development of fifth floor patient rooms and renovations to its Cancer Center.

Mosaic had attempted to gain a foothold into what it viewed as affluent markets in Platte and Clay counties. Those markets have more patients that use private insurance than some of other Mosaic’s markets.

While Mosaic says while the number of in-patient days in its hospital has grown in the past year, few of the patients from the Platte and Clay county clinics came to the St. Joseph hospital for treatment.

Some of Mosaic’s clinics, including the one at Parkville, were seen as being “overbuilt” with amenities by some Mosaic critics. The flagship clinic at Shoal Creek near Liberty featured a water fountain, and the Shoal Creek and Parkville clinics featured a chef on site who cooked up healthy food and “life guides” with tablet computers to get people checked in.

A physician formerly associated with Mosaic (formerly known as Heartland), told The Landmark the chief executive officer at Mosaic misread the market in Platte and Clay counties.

“The CEO that took over approximately four years ago, Mark Laney, got a little aggressive and opened up all these castle-type clinics south of Saint Joseph and essentially thought people were going to drop everything and come to them. And he spared no expense,” said the doctor, who did not want to be identified for this article.

“They should have started putting feelers on something like that. People (in the Platte and Clay county area) are not going to drop what they’re doing and go to your shiny facility. You don’t go nuts and start spending money on these castles,” the doctor said.

The doctor said the cost of Mosaic’s misjudging the market “is going to be astronomical.”

It is not known how much Mosaic spent on the Kansas City area clinics. A St. Joseph News-Press article in 2014 listed the cost at around $60 million.

The News-Press reported the clinics lost $14 million in 2013 and that a 2014 report in Fitch Ratings disclosed that Mosaic’s management expected the clinics to become profitable in 2018.

The Mosaic CEO, Mark Laney, insisted to the News-Press that the Kansas City area clinics did not act as a drain on Mosaic’s operation in St. Joseph. According to the News-Press, Mosaic reported nearly $606 in operating revenue and $7.2 million in operating income for the fiscal year 2017. That compares to $562 million and $5.5 million the previous year.