• MedPartners (Birmingham, AL) has closed the sale of assets of the physician practice management business that provides services to Kelsey-Seybold Medical Group (Houston). St. Luke’s Episcopal Health System and Methodist Health Care System purchased the assets. MedPartners received $150 million in cash proceeds, before payment of transaction costs, working capital settlements, and facility completion costs, the company said. Through the joint venture, the two health systems acquired the MedPartners and Kelsey-Seybold management services agreement and related assets, valued at about $89 million, and a major new site for Kelsey-Seybold and other assets, valued at about $61 million. MedPartners has also announced that it has reached an interim agreement with the state of California to begin implementing the terms of the proposed settlement agreement regarding the company’s California physician management operations. The interim agreement provides that the California business and assets shall be returned and managed by MedPartners, under supervision of the U.S. Bankruptcy Code, and that a special monitor will oversee operations. MedPartners will fund the working capital requirements of its subsidiaries.
• PhyMatrix Corp. (West Palm Beach, FL) is repositioning itself as a company that provides services supporting the pharmaceutical and managed care industries while it exits the physician practice management and ancillary medical service businesses. The company is having ongoing discussions with potential buyers and expects to realize net proceeds of about $100.8 million. Once the sales are final, the company will change its name to Innovative Clinical Solutions. The company has also made several management changes, appointing Michael Heffernan as co-CEO of PhyMatrix, alongside co-CEO Abraham Gosman. John Wardle is the new COO for the provider network management business, Bryan Dieter has become CIO, and Lisa McAlister will serve as interim CFO. PhyMatrix released its financial results, showing revenues of $291.3 million in FY98 ended Jan. 31, compared to $281.2 million in FY97. The company posted a net loss of $130.8 million, $3.91 per share, compared to a net income in FY97 of $10.3 million, 35 cents per share. During 4Q98, the company saw a net loss of $76.6 million, $2.29 per share, on revenues of $61.8 million, compared to a net income of $5.8 million, 19 cents per share, on revenues of $81.2 million in 4Q97.
• Physicians’ Specialty Corp. (Atlanta) reported record revenues of $21.5 million for 1Q99 ended March 31, compared to revenues of $12 million for 1Q98. Net income was $1.7 million, 18 cents per share, compared to 1Q98 net income of $96,000, 14 cents per share. The company has also promoted Larry Kraska to COO, effective April 30.
• Covalent Group (Wayne, PA) has signed a $4.2 million contract with a pharmaceutical firm to conduct a clinical study over the next two years. The study is the third of its kind that will conduct a cardiovascular trial of pharmacological interventions to reduce coronary atherosclerosis, said Covalent President/Chief Medical Officer Dr. Kenneth Borow.
• ProHealth Physicians MSO (Farmington, CT) has contracted for Per-Se Technologies’ (Atlanta) electronic commerce services. The services will provide ProHealth with online access to resource scheduling, accounts receivable management, patient billing and collection services, and the ability to connect with other healthcare partners. ProHealth plans to deploy the technology this year for its 150 physicians in 83 locations throughout Connecticut.
• Tessa Complete Health Care (Oakbrook Terrace, IL) said that it has relocated its San Bernadino, CA, clinic to Colton, CA, and has implemented a marketing plan that coincides with the relocation. The plan will focus on employer groups, worker’s compensation, and personal injury attorneys, as well as the city’s association groups. Tessa officials believe the groups are a large source for patient referrals.