It looks as if MedPartners Corp.'s troubles are infecting the executive suite at Columbia/HCA Healthcare Corp.
Scott Mercy, president and chief executive officer of America Service Group (ASG), a physician practice management company that provides healthcare in prisons, was supposed to be Columbia's first-ever vice president of managed care by now. Mercy would have gone to Columbia upon the January closing of MedPartners' $59 million stock-swap acquisition of America Service Group.
But when MedPartners' stock tanked in early January, sending the value of the deal down to $25 million, ASG signaled timeout.
The company hasn't called the marriage off, but it can if MedPartners' stock averages less than $17.50 per share during a 30-day trading period. MedPartners' price has been substantially below that level since the day it announced that its merger with PhyCor had failed and it planned to take $145 million in charges to cover various expenses. ASG is negotiating with MedPartners over whether to complete or dissolve the merger, according to Mercy. A decision is expected sometime in March.
Mercy had journeyed the few miles from ASG's Brentwood, Tenn., offices to Columbia's headquarters in Nashville a couple of times in preparation for his new job, but that was before MedPartners' troubles began. Dan Moen, president of Columbia's Sponsored Network Group, as of Feb. 16 started keeping Mercy's seat warm by taking on the title of interim vice president of managed care.
The vice president position was created because hospitals and other Columbia facilities are seeking corporate-level help on managed-care issues. When Mercy arrives, he is supposed to begin building his own staff and putting together a specific strategy for his department.
But Mercy, who announced his resignation from ASG on Dec. 9, 1997, remains there, and for how long no one knows. A Feb. 17 press release announcing new executive hires at ASG included a line stating Mercy "confirmed his plans to remain in his role at ASG," with no reference to how long or whether that meant he didn't plan to move to Columbia.