Mark Wagar, who was MedPartners' key executive in Southern California, has left the company to become chief executive officer at a Dallas-based physician practice management company.
Wagar now leads American Physician Partners, whose 241 doctors make it the nation's largest radiology-only PPM. Wagar replaced Gregory Solomon, who resigned.
Wagar says he was brought in to strengthen relationships with investors and prepare the company for growth. Since the company went public late last year, its stock has languished below its initial public offering price of $12.
Wagar says he liked APP because of "fundamentally sound" finances and its focus on doctors, who own a majority of stock and sit on a company advisory board.
APP announced Wagar's hiring May 20 at its first stockholders meeting. MedPartners did not announce Wagar's departure.
Wagar says he stepped down voluntarily as president and chief operating officer at MedPartners April 2. According to MedPartners' Securities and Exchange Commission filings, Wagar and the company are still negotiating the terms of his severance. MedPartners executives had no comment.
Wagar left MedPartners two weeks after the March 18 hiring of Mac Crawford to replace founder Larry House as CEO. House stepped down in the wake of a failed merger with PhyCor and a subsequent stock price collapse. Wagar says he was a candidate for House's position.
"I worked with the board after it advocated the idea of an outside CEO," Wagar says. "I had determined that once we got that accomplished, I wanted to look at other options."
Wagar was chief operating officer at Mullikin Medical Enterprises, a 450-physician network in Long Beach, Calif., when MedPartners acquired it in 1995. He was promoted to second-in-command at MedPartners in July 1997. He had been guaranteed a spot at PhyCor if the PPM hadn't called off its $8 billion merger with MedPartners in January.
Since then, MedPartners' stock price has fallen precipitously along with its earnings. The company's Southern California open-access plan in particular turned out to be a money drain, and Wagar fell victim to that, says Piper Jaffray Managing Director Brooks O'Neil.
Since there are few experienced PPM executives available for hire, APP figured it was worth finding out if Wagar's experience could be positive for the company, O'Neil says.
"It's hard to say whether he's learned valuable lessons or whether he'll repeat his mistakes at MedPartners," O'Neil says.