Thanks for link. That poster makes a compelling case for PDX being undervalued (assuming nothing comes of the allegations). Unfortunatly as I'm sure you can appreciate the Yahoo boards are full of misinformation due to the nature of poster idenity etc.
I did do a 3 month search of Pediatrix on Lexus and came up empty on the subject. I do find it curious that PDX hasn't attempted to refute speculation on the subject.
Given that PDX is a roll up of physican practices with insider ownership in the 65% range would seem to provide incentive for the physican/owners to preserve shareholder value.
None the less PDX seems to be a intriguing issue with the possible incentive for the shorts to avoid covering until next tax year and a incentive for longs to sell out this year to take advantage of their loss.
Here's a link to a article addressing companies in the physican managment area
biz.yahoo.com
Here's a article (1 year old) on Physican mgmt practices that mentions Pediatrix, American Oncology (now US Oncology NASDAQ: USON), Med Partners and PhyCor
All in all the sector has had its troubles this year
Mad2
Copyright 1998 IBJ Corporation
Indianapolis Business Journal
January 26, 1998
SECTION: FOCUS; Health Care Quarterly; Vol. 18; No. 46; Pg. 15
LENGTH: 969 words
HEADLINE: Nasser Smith eyes national partnership;
Plan could result in IPO in 1999
BYLINE: EVELYN ELLISON, IBJ REPORTER
BODY:
One of Indianapolis' largest physician groups is eyeing a partnership with multiple doctor practices around the country that could result in a $ 180 million physician practice management company.
Nasser Smith & Pinkerton Cardiology Inc., a locally based group of 41 cardiologists and 23 primary care physicians, has been in talks for about a year with seven other cardiology practices, said Chief Operations Officer Stephen McAdams.
The doctors have drafted a business plan to create a practice management firm that would eventually go public and acquire other practices, McAdams said.
"A national organization is what we're looking at," he said. "We plan to form the company effective July 1."
Although McAdams declined to name the groups involved in negotiations, he said they are in Atlanta; Baltimore; Chattanooga, Memphis and Nashville, Tenn.; Des Moines, Iowa; and other Indiana cities. The doctors came together during a regular meeting of the Cardiac Leadership Alliance, a trade group to which they all belong, he said.
Together, the practices include 204 doctors and 1,200 employees and generate about $ 180 million in annual revenue, McAdams said.
Each group has shelled out $ 20,000 to fund initial research into a PPMC, said Tom Winston, an administrator with Tennessee-based Chattanooga Heart Institute who is acting as CEO of the combined groups.
Growing industry
Physician practice management companies, or PPMCs, have spread across the country in recent years as doctors have sought strength in numbers. Al-though they come in many variations, most PPMCs operate by acquiring the assets of physician groups in return for long-term contracts to manage practices' business and administrative functions.
Several of the most successful PPMCs have become large publicly traded companies. Nashville-based PhyCor Inc., for example, operates 55 clinics with about 3,900 physicians in 28 states.
PPMCs have also sprung up to manage practices within a single medical specialty, such as the Fort Lauderdale, Fla.-based pediatrics group, Pediatrix Medical Group Inc. and the Houston-based oncology group, American Oncology Resources Inc.
But few, if any, publicly traded companies target cardiologists, McAdams said. He hopes Nasser Smith's group will be the first.
The companies are popular for several reasons, said Alan Dansker, a health care attorney with Bingham Summers Welsh & Spilman in Indianapolis.
Because many PPMCs issue public offerings, doctors see them as a way to raise capital, he said. Physician practices need funds to buy new medical equipment and information systems.
PPMCs also provide the critical mass necessary to negotiate bulk purchasing agreements and favorable contracts with managed care companies, Dansker said.
"We think that by affiliating with other cardiology groups, we'll have more leverage in contracting [and] dealing with regulatory agencies," McAdams agreed.
Recent skepticism
Some industry observers have begun to ask questions about PPMCs in recent weeks, however.
Two of the largest companies in the field, PhyCor and Birmingham-based MedPartners Inc., watched their stock plummet in early January when they called off a proposed affiliation.
MedPartners' stock dove 45 percent in two days on the news, combined with an announcement that it would take one-time charges of $ 145 million associated with losses in its West Coast operations.
Analysts expressed concern that capitation, or agreements to provide health care for fixed fees, hurts PPMCs when medical costs are higher than expected.
Wall Street has never had as much confidence in smaller PPMCs as it has in PhyCor and MedPartners.
"When you get these smaller groups, they're really unknowns," said Bradley Wilson, an analyst with GS2 Securities.
Often, small PPMCs appear to simply be schemes to make money through acquisitions and initial public offerings, said Mike McCaslin, a health care consultant with locally based Whipple & Co., part of The Somerset Group.
Sometimes, savvy investors try to start them with little or no input from physician managers, he said.
"The vultures are out trying to take advantage of a stressed industry," McCaslin said.
Tentative plans
Nasser Smith's PPMC--which would tentatively be named "Orion--The Cardiovascular Care Group"--should be protected from too much exposure to capitation, McAdams said. That's because the founding doctor groups are based in markets where capitation doesn't have a strong presence, he said.
Orion would also be somewhat unique in that it would be administered primarily by doctors, he said.
McAdams cautioned, however, that plans have not been finalized for the collaboration. Organizers are still determining where the firm will be based.
"We're still in the planning, discovery and investigation stage," he said.
Typically in the formation of PPMCs, between 40 percent and 50 percent of the practices initially involved in the research decide not to go through with the deal, McAdams said. That's usually because physicians don't want to give up any control of their practices, he said.
Plus, the groups would have to turn over some of their profits to the PPMC--usually between 10 percent and 30 percent of income before physicians' salaries and benefits are deducted, McAdams said.
Nasser Smith physicians will vote on the collaboration in the next two months, he said.
"I think it will go forward," Winston said. "It's just a question of how many of the groups that are involved in the initial [research] will participate."
If the collaboration is successfully launched, the practices hope to be able to issue an initial public offering by January 2000, McAdams said.
The company would attempt to acquire three to six additional practices annually for five years, Winston said.
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LANGUAGE: ENGLISH
LOAD-DATE: January 28, 1998
Project Id: information
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