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Biotech / Medical : Novacare (NOV) breaking out... -- Ignore unavailable to you. Want to Upgrade?

To: Sword who wrote (210)	1/30/1998 10:15:00 AM
From: Todd D. Wiener	Read Replies (2) \| Respond to of 420

Jerry- Last week, I tripled my position in NCES and boosted my NOV position by 50%. The current price is very attractive for both stocks, especially NCES. If you are referring to NOV's use of lower paid therapists for contract therapy rehab services, the situation is a win-win for NOV. The company feels that it can offer the same quality of care by using PT assistants for some services. Here's an analogy in a primary care setting: Why should a company pay its nurses to take a patient's blood pressure, when a technician could do it just as well? The technician would receive a lower salary, because he/she has a less skilled job. NOV is simply modifying their approach by not having full therapists do work for which they are overqualified. If a service can be performed just as well by a lower-salaried employee, why not do it? NOV management is vey sharp. They anticipated this Medicare issue a few years ago, and they have planned accordingly. I don't see any problems with the restructuring charge or anything announced in either earnings report. The charge is non-cash, and it was very smart to record the non-recurring charge in the same quarter as the non-recurring gain. I'm all smiles with SMTC! :-) 8"B { ; ^ j Todd