FPA Medical Management, a San Diego-based physician practice management company, late last week entered into an agreement to acquire San Diego-based HealthCap in a stock swap valued at $41.6 million. HealthCap, a competing practice management company, has a network of 2,110 primary-care physicians and OB/GYNs with 347,000 patients in five states. Its 1997 revenues are projected to total $57 million. The deal will allow FPA to expand into Nevada and increase its 1997 pro forma revenues to more than $1 billion. The deal is expected to close by the end of this month.
Martin Manley, Kaiser Permanente's managing director of hospital strategy in California, is resigning effective June 30. The company confirmed the resignation after it was reported late last week in the San Francisco Business Times. Manley was responsible for developing Kaiser's strategy of shutting down its own hospitals and creating alliances with other hospitals in California to treat Kaiser-insured patients (See related story, p. 12). The company said Manley plans to pursue other professional interests.
Moody's Investors Service confirmed Columbia/HCA Healthcare Corp.'s debt ratings late last week but changed its outlook to negative. About $8.6 billion of debt securities will be affected by Moody's announcement, which came after a six-week review of the Nashville-based company. The firm's review came after Columbia announced a stock repurchase program and decided to pay cash for Avon, Conn.-based Value Health. Moody's said those transactions will cause increased debt levels in the near term. In the future, Moody's said Columbia will be more likely to use debt to finance acquisitions instead of equity, as it has in the past.
The House and Senate late last week passed a supplemental appropriations bill that includes about $125 million in temporary funding to extend Medicaid benefits to legal immigrants through the start of next fiscal year in October. It also includes a provision that would eliminate funding for HCFA's competitive-bidding demonstration project in Denver. However, President Clinton is expected to veto the bill for reasons unrelated to those provisions.