MedPartners acting Chief Executive Officer Richard Scrushy said last week he won't consider selling all or part of the company despite integration problems on the West Coast.
"Absolutely nothing's for sale," Scrushy said. But he said the buying spree that made MedPartners the nation's largest and most diverse doctor manager is over.
Countering growing concern about operational problems, which caused an unexpected fourth-quarter loss, Scrushy called MedPartners "financially the strongest company in the PPM business.
"There's no doubt that in the next few months the company will have that totally corrected," he said of the problems.
The search for a permanent leader after the Jan. 16 resignation of CEO Larry House could take six months or longer, he said. Scrushy, who temporarily took the helm of MedPartners while running HealthSouth Corp., made himself available for an interview late last week. (He was unavailable for the related story on p. 20, which had an earlier printer's deadline.)
Jacque Sokolov, M.D., who served as chairman of Coastal Physician Group during its restructuring, said MedPartners board members and investors asked "informally" if he would join management.
Sokolov said he's not interested in the CEO job. He said MedPartners, like Coastal, grew in too many directions and now must identify its core competencies and divest unrelated assets.
"In the right situation I would be very happy to look at a MedPartners relationship because I've been there before," said Sokolov, who runs a Los Angeles-based company that specializes in building provider-sponsored organizations. "Having said that, I learned from my Coastal experience that management has to be in sync with the board."
On the West Coast, layoffs and management turnover have MedPartners' business associates worried.
Long Beach (Calif.) Memorial Medical Center has about 20% of its revenues tied to capitation contracts involving MedPartners, including 3.5% that flow directly from the Birmingham, Ala-based company.
"We're certainly hopeful that the board and the leadership do whatever they need to do to restructure, to regain the stability to move forward," said the hospital's chief executive officer, Chris Van Gorder.
Specialty physician groups, hospitals and others who service MedPartners' global capitation contracts have "major concerns about the long-term viability of those contracts," said Richard Sinaiko, CEO of Healthcare Practice Enhancement Network, a Los Angeles-based consulting firm.
Meanwhile last week, America Service Group, a Nashville-based correctional healthcare company, canceled a stockholders' vote on a pending merger with MedPartners. It said MedPartners agreed to allow it to cancel the merger if MedPartners' stock price does not exceed $17.50 for 30 consecutive trading days.
The merger was worth about $59 million when it was announced Oct. 1. A plunge in MedPartners' stock price decreased its value to $26 million last week.