Escondido, CA

Arch Health And Graybill medical groups announce affiliation

Two of San Diego County North Inland’s largest medical groups, Graybill and Arch Health, have joined forces to create the largest health network in the region, Palomar Health Medical Group. 

The affiliation is effective on December 1, 2020, and will expand access and improve the coordination of patient care. Patients will now have access to a broader network of providers who will be able to collaborate on the best care plan, while being able to continue seeing their same physicians in the same offices.  

“We are excited about the opportunity to bring an expanded network of high-quality providers to our community,” said Arch Health Medical Group Chairman of the Board Harvey Hershkowitz. “This closer coordination of care will improve the health of our community.” 

“Patients will immediately reap the benefits of having more physicians to choose from in their network and a smoother referral process to specialists,” said Graybill Medical Group CEO Floyd Farley. “This partnership will only improve the quality of care provided in our region.” 

“This expansion of primary care will enhance our ability as a health system to provide seamless, coordinated care across the continuum,” said Palomar Health President and CEO Diane Hansen. “This positions us well to meet the challenges of healthcare delivery.” 

Palomar Health Medical Group will have 20 locations throughout North San Diego County, Murrieta and Temecula, employ 170 multi-specialty physicians and 600 support staff and serve more than 150,000 patients. Graybill Medical Group will continue to operate its two offices in Vista and Oceanside independently outside of the Palomar Health Medical group network. 

To reduce confusion, Palomar Health Medical Group will not show up as an option during open enrollment and patients should select either Arch Health or Graybill as their medical group. Patients will be notified of the transition in the coming weeks. Copays, deductibles and insurance premiums will not be affected by the merger although it has the potential to reduce the cost of care in the long-term.

Palomar Health was established in 1948 and currently provides health care in 

North San Diego County through its two medical centers and more than 900 affiliated medical providers serving more than half a million people. 

Arch Health Medical Group is a multi-specialty, not-for-profit health care organization.  Based in San Diego County with more than 90 providers and 300 employees serving nearly 80,000 patients in Poway, Rancho Peñasquitos, Escondido, Ramona, and Valley Center.  Its partnership with Palomar Health allows it to provide inpatient and lab services and physical therapy. For more information visit  

Graybill Medical Group was established in 1932 by Dr. Martin Graybill, and has grown to become one of the region’s premier medical groups with broad based primary care services and many specialty services. Today it has more than 80 physicians and advanced practitioners, with offices in North San Diego and South Riverside Counties. For more information visit

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Times-Advocate editor David Ross interviewed Floyd Farley, Graybill’s CEO to talk about the merger and how it will benefit patients in the area.

Farley noted that Graybill is a longtime member of the community—since the 1930s. “It has always been focused on primary care services and the community’s needs. With this partnership we think we will even better collaborate in providing service to the community,” he said.

Asked if Graybill will be absorbed into Arch Health and rebranded, Farley said, “The Graybill name will continue. The group remains independent entity. What I think you will see is a merging and cobranding of the medical foundation, which is going to be renaming itself to Palomar Health Medical Group.”

Farley continued, “We are excited about working with the physicians group part of that organization. Our organization is about equal in the number of physicians. So collectively we are doubling our resources by coming together. The agreement is effective today [Tuesday, December 2] and we are very excited about it. We are working through all of the transitioning.”

Patients probably won’t notice many obvious differences. “Today there is no change,” said Farley. “All our practices are open as usual. We are looking forward to further developing our practices and expanding our numbers of physicians as well as more locations. Our group has twelve locations and today we’d like to further add physicians as patients’ demands and needs occur. We think there are better opportunities to serve some communities that are not as well served and in need of primary care physicians.”

Will the two organizations merging lead to an economy of scale, such as fewer support employees? Possibly not. “The employees will be very much continuing in the activities they have been doing,” he said. “Our three hundred plus employees that are the clinic staff and support, become employees of the foundation. Clearly each and every one of our employees will continue to work with our physicians as employees of the foundation.”

Although the merger agreement has been reached, there needs to be a final clean-up of documents before they celebrate with a signing ceremony, he said.

Farley added that the merger is a “Match up of the community’s hospital system We have a closer working relationship with them and through the foundation we will be able to jointly plan community needs. Over time there are economies when you bring groups together. I think you’ll find technical improvements can occur. It’s a wonderful world out there on apps that allow us to better connect with our patients. We are excited.”

The merger will probably further the move towards teleconferencing doctor’s visits, said Farley. “We do a fair percentage of that now, but there will be more interconnecting and letting patients know they can go online and register.”

New technologies will also be brought to bear in chronic care, he said. “Including some applications that will help us better treat diabetic care and COPD.”

Graybill and Palomar have been negotiating for many, many months, which raises the question: Why did it take so long?  Farley replied, “We were making sure all parties are comfortable and understanding what to do together and go forward together—and candidly COVID. It has made us all have to focus on that pandemic environment. It’s limited our ability to get the focus we’d like to on coming together. But it’s occurred finally and we are excited about it. We look forward to upcoming success.”

Editor Ross also spoke to Palomar Health CEO Diane Hansen about the merger.

She explained that Arch Health—which is a physicians foundation,—is actually the entity that will be acquiring Graybill, which is also a physicians foundation. “Such foundations exist as 501(c)3 nonprofits because in California we can’t hire physicians,” said Hansen. “Most every other health organization has a physicians organization. Arch Health is our physicians foundation that is wholly aligned with us.”

The benefits to the district and the community, she said, “is to provide better access and more efficient and effective care. We will now be working together instead of competing; strategizing to provide better patient access, improving the quality of care and overall have the ability to work together to improve the health of our community.”

Economies are expected, said Hansen. “Example: we have an office for Arch in Valley Center. Graybill also has an office in the same plaza. It will allow us to work together to provide the same level of service in VC but also provide another location perhaps in another community where we don’t have a presence. There are a lot of opportunities to provide synergies. It will take the best characteristics and traits of Graybill and pair with the best characteristics and traits of Arch.”

Will that mean cost savings? “Right now we don’t anticipate that,” said Hansen. “We are working on other opportunities. This acquisition is more about us having the ability to better care for our community, to work together to be sure we are providing the best level of care, and strategizing on outcomes. When you are competing in a market there’s a much different approach to when you are partnering together to provide care.”

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