Canadian transportation giant Laidlaw and leading emergency physician manager EmCare Holdings are betting that payers will want one-stop shopping for ambulances and emergency room physicians.
Burlington, Ontario-based Laidlaw said last week it will acquire EmCare for about $400 million in cash.
EmCare, based in Dallas, staffs emergency departments at about 160 hospitals in 21 states, including prominent, longstanding clients such as Baylor Health Care System in Dallas, Orlando (Fla.) Regional Healthcare System and Memorial Healthcare System in Houston. Its 1,800 physicians handle about 3% of all emergency room visits nationally.
Laidlaw owns American Medical Response, the country's largest ambulance company, which it purchased earlier this year for $1.1 billion (Jan. 13, p. 29). Its STAT emergency department staffing division, with 270 physicians, will be folded into EmCare, which will operate as a division of Laidlaw.
The deal is expected to be completed in early September.
EmCare founding Chairman and Chief Executive Officer Leonard Riggs Jr. and President and Chief Operating Officer William Miller III will remain in their jobs with three-year management contracts.
Laidlaw is attempting to pioneer carve-out contracts that bundle emergency transportation, emergency physician staffing and nurse triage services in prepaid managed-care markets.
Riggs said ambulance services have transformed themselves from "load-and-go" operations into mobile intensive-care units. "They're really healthcare providers," he said.
One place ripe for such an arrangement would be Santa Clara County, Calif., where Laidlaw provides ambulance services and Emcare staffs two hospital emergency departments.
"We have some time to perfect this before we move on to other (markets)," Riggs said.
Meanwhile, in some fee-for-service markets Laidlaw ambulances could steer unassigned patients to hospitals that contract with EmCare for emergency physician staffing, Riggs said.
EmCare reported 1996 net income of nearly $11 million on revenues of $196 million. Laidlaw, which also provides school busing and municipal transit, had net income of $162 million on revenues of $2.3 billion.
Last month EmCare paid nearly $8 million to settle allegations that it overcharged federal healthcare programs. The payments stemmed from false claims allegedly submitted by its billing company.