• MedPartners (Birmingham, AL) and the state of California have agreed on a settlement regarding the company’s California physician management operations. The settlement provides for a transition plan for the disposition of MedPartners Provider Network (MPN) and MedPartners’ California physician practices assets, as well as the continued funding of operations with proceeds from the sale of the company’s physician practice management assets in California and loans from affiliated healthcare plans. The state will restore MPN’s assets, operations, and management responsibilities to MedPartners, which will operate MPN as a debtor in possession, while it continues to monitor the settlement and transition plan. Two MedPartners insiders bought shares of the company’s common stock in March, according to a Form 4 filing with the Securities and Exchange Commission (Washington). Charles Clark, executive vice president of corporate strategies, bought 50,000 shares on March 5 and 9, paying between $4.81 and $5.13 per share. At the end of the month, he directly owned 50,000 shares through an individual retirement account, another 9,177 shares jointly with his spouse, and held indirect ownership of 7,000 shares. Edward Novinski, executive vice president of managed care, bought 25,000 shares for $4.81 each on March 9. At the end of the month, he had direct ownership of 37,351 common shares.
• ZA Consulting (Washington), a healthcare management consulting and financial advisory firm, is warning medical groups affiliated with physician practice management (PPM) companies that they face higher odds of failure than groups affiliated with hospitals. This is because of physicians’ higher expectations for financial success and because of costly service fees. Two directors with ZA are urging physicians and executives to keep guarded and to be aware of the state of their PPM.
• Tessa Complete Health Care (Oakbrook Terrace, IL), which provides PPM services to multi-specialty clinics focusing on rehabilitative care, signed a letter of intent to acquire the assets of several Chicago occupational medical health clinics. The new clinics service more than 2,400 businesses in the Chicago area. They will expand Tessa’s service areas, allowing the company to treat more work-related injuries.
• Advanced Health Corp. (New York) watched its shares climb 48% last week after Gilford Securities started covering the company with a buy investment rating, reported Dow Jones Business News. Analysts stopped covering the company because of its PPM business, and the company announced plans last November to exit the business.
• Medical Manager Corp. (Tampa, FL) reported that revenues rose 33% in 1Q99 to $41.3 million, compared to $31 million in 1Q98. Net income was $5.6 million, 24 cents per share, compared to $3.5 million, 16 cents per share, in 1Q98.