MedPartners tapped E. Mac Crawford, top executive of Magellan Health Services, to fix its operations just as it revealed a whopping fourth-quarter loss.
Crawford, 49, was named president, CEO and director of the Birmingham, Ala.-based physician practice management company last week, replacing interim CEO Richard Scrushy, who remains chairman.
Scrushy called Crawford "one of the best operators and most experienced executives in the healthcare industry."
His task will be to trim costs and hone operations, a process started under Scrushy. In January, the company announced an end to the rapid-fire acquisitions of its founder and former CEO, Larry House, who resigned after a failed merger attempt with rival PhyCor.
Still, it's expected that Scrushy, who owns a substantial stake in MedPartners, will maintain close oversight.
Last week, MedPartners downplayed its financial results. The company was hammered by a fourth-quarter restructuring charge of $646.7 million, which far exceeded the $115 million it predicted Jan. 7. The difference was due mainly to a decision to write down $522 million of goodwill from the closure of 84 clinics.
In a written statement, Crawford said MedPartners' three businesses-physician practice management, pharmacy benefit management and hospital-based physician contracting-are "fundamentally strong."
"In developing the turnaround plan, I particularly intend to focus on issues of management, financial controls and information systems," Crawford said.
Crawford, a certified public accountant, became president of Charter Medical Corp. in 1992 and subsequently took the position of CEO as well. Charter became Magellan Health Services in 1995 when it acquired a 51% interest in Green Spring Health Services, which manages mental health and substance abuse treatment benefits. Under Crawford, the company expanded into disease management, an area in which MedPartners also claims expertise.
The young PPM industry suffers an undersupply of management talent. Scrushy said that while Crawford's contact with doctors might be limited, he "turned around a large organization in Magellan and possesses extensive expertise in the managed-care and provider environments."
MedPartners lost $840.8 million, or $4.47 per share, on revenues of $1.7 billion, compared with net income of $29.9 million on revenues of $1.4 billion in the fourth quarter of 1996. For the year, the company reported a net loss of $820.6 million on revenues of $6.3 billion, compared with a loss of $145.5 million, or 83 cents per share, on revenues of $5.2 billion in 1996.