Jackson & Coker, a firm that led the physician recruitment industry in the 1980s, is attempting a revival after a foreclosure sale in April.
But it won't be easy. A throng of competitors, including several firms started by former Jackson & Coker executives, has seized the industry.
Jackson & Coker's new owner, Thomas M. Conner, reorganized the Atlanta-based firm June 1.
"A past image that is still equated with Jackson & Coker is that we are expensive and inflexible," spokeswoman Stacy Hutsell said. "We have restructured so that we have very competitive pricing. We are very, very flexible now."
Jackson & Coker merged its temporary staffing subsidiary with its permanent search operation to better coordinate those functions, she said. It started a division for contingency searches and added "physician extenders"-nurse practitioners and other aides who can perform some physician functions-to its roster.
Conner said surveys show Jackson & Coker is still the most widely recognized name in the industry. He said he expects the firm to merge with others, and that two leading staffing firms are interested in investing. He declined to be more specific.
"No one would be looking to invest millions in Jackson & Coker if they saw us as road kill," Conner said.
He added, "We expect Jackson & Coker to be at the top of the pile when it shakes out."
Indications are, it has a long climb ahead.
"I think it would be very difficult for anybody to come in today and take over a dominant position," said Richard Jackson, Jackson & Coker's original visionary.
Jackson was ousted from the company in 1987. He is now president, chief executive officer and chairman of Atlanta-based Allegiant Physician Services, which has a physician search arm.
Jackson's departure led to the exodus of at least six vice presidents who left to start competing companies.
They include two of what industry sources say are the three dominant recruiting firms: Irving, Texas-based Merritt, Hawkins & Associates and Atlanta-based Harris, Kovacs, Alderman. The third is St. Louis-based Cejka & Co. (See related story, p. 88).
In a strange twist, Jackson married Cejka's president, Sue Cejka, which gives him a link to all three leading firms.
Physician recruiting is a mature market with more than 400 players, not the mere handful that existed a decade ago. Jackson & Coker is no longer among the top 10 firms doing permanent placements, Jackson said.
Managed care has made hospitals and medical groups more concerned with low costs and prompt results. Some hospitals are buying physician databases and doing recruitment in-house. Recruitment firms have branched into compensation consulting, practice valuations, retention and other areas.
"To come back in this market is going to be very difficult," said Charles E. Harris, a partner in Harris, Kovacs, Alderman.
"If they started to pay attention to what they need to-and that is service-it could turn around quickly," said Tom Cook, vice president for physician development for the Tennessee division of Columbia/HCA Healthcare Corp.
Several executives of physician recruiting firms interviewed by MODERN HEALTHCARE said it will very difficult to make Jackson & Coker succeed without an owner who has experience in physician recruitment.
"So far I have not seen anybody come from outside the industry that didn't know the business and has been successful at it," Jackson said.
Conner has been a healthcare management and financial consultant specializing in medical imaging/radiology and home care since 1987. Before that, he held several executive jobs with American Medical International, the last of which was vice president and chief financial officer for inhalation therapy services. Conner said his experience will bring a customer perspective.
Several former Jackson & Coker employees blame the firm's downfall on mismanagement by an owner who didn't understand the business.
In 1989, then-owner Ken Stringer established an $18.5 million credit facility with Chicago-based Heller International Corp. Jackson & Coker defaulted in 1994 and 1995.
Heller conducted a foreclosure sale April 14 after laying off more than 100 employees, or 40% of its work force in December.
According to a document from Heller obtained by MODERN HEALTHCARE, the company was sold for $1 million less than its debts of $13.3 million. Heller also financed the purchase.
The company now has "over 125" employees, and 1994 revenues were $25 million, Conner said. Most of that revenue was from temporary staffing.
Despite his unhappy departure, Jackson said he would like to see his former company make a comeback. "It's hard to give birth to an entity and not care about it," he said.