A decision by IPC-The Hospitalist Co. to pursue a $105 million initial public offering is a sign of the growth seen in the hospitalist industry. The move also could turn into a big payoff for its management, which owns more than 9% of the company.
On Aug. 31, IPC registered with the Securities and Exchange Commission to sell up to $105 million worth of stock, a first for the industry, according to the Society of Hospital Medicine (Hospitalist provider files with SEC to go public, Sept. 17).
As a result of the offering, which by law limits communication by the company, officials for North Hollywood, Calif.-based IPC declined to comment. Others say the offering shows how quickly and how far the hospitalist industry has expanded.
Its one more bit of evidenceif anybody still needs moreabout the growth of the field, says Robert Wachter, M.D., chief of medical service at the 574-bed UCSF Medical Center, San Francisco, who originated the term hospitalist in a 1996 New England Journal of Medicine article.
Its gone from 1,100 people 10 years ago to now, according to the AHA (American Hospital Association), more than 20,000. Its the fastest-growing field in the history of medicine, he says.
He added that the University of California at San Franciscos hospitalist program grew to 38 people from 26 in the last year, with resident work-hour limits and management of complex cases such as neurosurgery, bone marrow and complex heart failure patients driving the growth.
Likewise, Rick Haugh, spokesman for the Colorado Hospital Association, says he didnt think the IPO would have an immediate impact, but thought it had meaning in the big picture. It is a sign of strength, Haugh says. Theres a lot of demand for hospitalists and intensivists.
According to IPCs registration statement filed with the SEC, hospitalist medicine is huge, but there is still room for growth. We believe that over 40% of all hospitals have formal hospitalist programs, and a greater number of hospitals have hospitalists practicing within the facility, the statement reads. It also notes that the number of hospitalists should reach 30,000 by 2010.
Does the growing economic strength of the hospitalist field translate to wealth for IPC? Wachter says yes. I look over their statement and I see a lot of zeroes there, so somebody is doing well, he says.
Indeed, Adam Singer, M.D., a pulmonary physician who founded the company in 1995, earned a total of $545,434 in 2006 and owns 6.49% of the company, according to the SEC filing.
Singer, 47, is chairman, chief executive officer, chief medical officer and a director of the company, and in 1998, was named a Modern Healthcare Up & Comer. The companys president and chief operating officer, R. Jeffrey Taylor, earned $348,202 in 2006 and owns 1.56% of IPC, according to the filing. He also is a director.
Chief Financial Officer Devra Shapiro, earned $284,754 in 2006, and owns 1.27% of the company. Richard Russell, executive vice president and chief development officer, earned $256,781 in 2006 and owns less than 1% of IPC.
The largest owners of IPCs more than 6 million shares of common stock are four investment companies, including 31% owner Scale Venture Partners and 25% owner Morgenthaler Venture Partners.
Others on the board of directors include Scale Venture Partners Managing Director Mark Brooks, VeriCare Chairman of the Board Thomas Cooper and former PacifiCare Health Systems Executive Vice President and CFO Wayne Lowell. (In 1993, Lowell was named a Modern Healthcare Up & Comer.)
Theres a huge growing field and theyre just taking a chunk of it, Wachter says. The market is doing its thing and well see which models turn out to be the most effective.What do you think? Write us with your comments at [email protected]. Please include your name, title and hometown.