Southeastern Emergency Physicians and three other physician contract management companies have agreed to consolidate in a private exchange of stock to form Team Health Group.
Team Health, which will be based in Knoxville, Tenn., will provide joint strategic planning, purchasing, billing, marketing and physician recruiting services.
The other three partner companies are Teleradiology Associates, Durham, N.C.; Team Radiology, Durham, N.C.; and Daniel and Yeager, Huntsville, Ala.
Under the agreement, assets and revenues will be combined, but current contracts will remain under each company's name, said Robert Sweeney, Southeastern's senior vice president for contract services.
Team Health plans to issue publicly traded stock within two years, Mr. Sweeney said.
In the past year, contract management companies have been broadening their range of services in response to market demands, he said.
"Hospitals have been asking each contract manager to help out in other areas," Mr. Sweeney said. Those include emergency, radiology, anesthesiology and primary care, he said.
Southeastern, which was formed in 1979, provides contract emergency services to 27 hospitals with 200 physicians in four states. Daniel and Yeager, formed in 1989, provides physician staffing services in radiology, anesthesiology and primary care to about 400 clients in 50 states.
Teleradiology provides equipment, remote scanning and on-call radiology services to 48 hospitals and radiology groups in more than 20 states. Teleradiology was formed in 1990. Team Radiology, which was formed in 1993, has contracts with four hospitals in three states with some 10 physicians.
Executives of the four companies declined to provide specific revenue information.
Because of its larger size, Southeastern was issued all of Team Health's preferred stock-588,000 shares. In addition, 1 million shares of common stock were issued. Southeastern was awarded 50% of the shares-which have a book value of $8.76 per share-with the other companies dividing the remaining 50% based on their annual revenues and liabilities, he said.
Southeastern will have five members on the nine-member Team Health board. Daniel and Yeager will have two board members, and Team Radiology and Teleradiology Associates will have one each.