An investor-owned Florida company has gotten its foot further in the door of the hospital business by purchasing Podiatry Hospital of Pittsburgh.
Fort Lauderdale-based Consolidated Health Corp. last month completed its $1.5 million acquisition of 13-bed Podiatry Hospital. Consolidated's parent, Rx Medical Services Corp., is a virtual unknown in the hospital industry but has a history of involvement in the imaging industry. Through Consolidated, Rx Medical, which had revenues of $28 million last year, is steadily increasing its hospital acquisitions and management contracts at specialty and rural hospitals.
"There is a significant niche in the areas we're looking into," said Rx Chief Financial Officer Robert Nissenfeld.
"We were predominantly in the diagnostic lab and (magnetic resonance imaging) business, and then we restructured our company and are expanding our interest in hospital acquisitions." Consolidated now owns three hospitals and manages two others and does hospital business in Mississippi, Pennsylvania and Virginia.
Consolidated also hired Fairfax, Va.-based Prime Time Health Care to manage the Pittsburgh hospital, which is affiliated with some 70 podiatrists.
"(Consolidated) likes this acquisition because it's a specialty hospital and has a niche," said Joseph Noviello, president of Prime Time. "This is only one of two (podiatry) hospitals in the country." The other is 28-bed Pacific Coast Hospital in San Francisco.
Like other specialty hospitals, Podiatry Hospital faces a challenging future in the world of managed care, which emphasizes lower costs. Some podiatrists are finding their work is being done by generalist and orthopedic physicians.
Podiatry Hospital has been profitable, but the onset of managed care has contributed to plummeting admissions. Admissions dropped 49% to 160 last year from 313 in 1993.
The hospital earned net income of $119,200 on $6.1 million in net patient revenues in 1995, the latest year for which financial data were available from HCIA, a Baltimore-based healthcare information company.
Proceeds from the sale and related conversion of the hospital to for-profit status were used to create the Podiatry Foundation of Pittsburgh. Hospital spokesman Jeremy Meyer said the foundation will "promote the podiatric profession and improve foot care."