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SurgiCare Inc. to Launch Its Fourth Surgical Center, Expanding Operation By 33%
SurgiCare, Inc., a Houston-based Ambulatory Surgical Center (ASC) provider,
announced today that it will launch the company's fourth multi-purpose surgery
center later this month. The new center, located in Pasadena, Texas, a suburb
of Houston, has passed its inspection with the Texas Department of Health,
and will be assigned an operating license number. It is due to open in the
next few weeks, with local surgeons performing procedures in its three operating
theaters by the end of the month.
SurgiCare's newest center, which will be a multi-specialty
surgery center with a heavy concentration on orthopedics and general surgery,
is a joint venture with Cirrus Health Services, Inc., a company that SurgiCare
recently joined forces with. The agreement calls for SurgiCare to help develop
and manage co-owned ASCs within Cirrus' growing list of specialty medical
buildings. This partnership has expanded SurgiCare's business model beyond
traditional mergers and acquisitions, providing it with a lucrative new avenue
for generating increasing revenues through its management expertise.
Back to TOC. Private Prison Firms Focus on Treatment as an Option
Faced with a declining crime rate, poor stock performance and bad publicity,
private U.S. companies that operate some prisons are shifting their focus
to drug treatment and rehabilitation to boost both revenue and their image.
And, while measures in California and New York calling for drug treatment
instead of prison for first-time offenders puts further pressure on prison
companies, the companies see it as a new opportunity.
Corrections Corp. of America (NYSE:CXW - news) and Wackenhut
Corrections Corp. (NYSE:WHC - news) continue to operate mostly prisons, but
they are also moving toward mental hospitals and substance abuse clinics.
Cornell Cos. Inc. (NYSE:CRN - news), already heavily focused on drug treatment,
has plans to open more high schools for juvenile delinquents. And, getting
away from their image as the tough controllers of unruly criminals, the companies
say they are seeking to cast themselves as caregivers focused on preventing
crime, rather than profiting from it.
"Our industry is still robust, but it's changing because
the government is starting to get smart, not soft, on crime,'' said Steve
Logan, chief executive of Cornell, which operates nine prisons and dozens
of treatment facilities. In a move that illustrates the new trends, prison
operators set up the Association of Private Correctional and Treatment
Organizations in May and chose Logan, whose company operates many more treatment
facilities than prisons, as its head. Analysts say the new approach should
eventually pay off for the industry, which has had a rough ride since its
inception in the 1980s.
PAST DIFFICULTIES
MacDonald, the only analyst who covers Wackenhut
Corrections, expects earnings of 90 cents per share this year, down from
91 cents last year. For the second quarter, he expects earnings of 25 cents
per share, compared with 23 cents a year earlier. Wackenhut shares, which
are well below their 1996 high of around $45, have risen from a low of about
$9 per share in January to $14.50 in early June, after the company said in
May it had won a contract to design, build and operate a 600-bed secure civil
confinement and treatment facility for sexually violent predators in Florida.
It closed at $12.95 on Tuesday.
Corrections Corp. of America (CCA), the biggest prison
operator with 61,462 beds in 65 facilities, is still reeling from a breakout
by six prisoners from Youngstown, Ohio, in 1998 and is trying to sell off
or fill its empty facilities and reduce its debt. CCA has seen its stock
price drop 97 percent from its high near $45 in 1998, and completed a ten-for-one
reverse stock split in May. It closed on Tuesday at $13.82. No analysts currently
follow the company, according to research firm Thomson Financial/First
Call.
Cornell, in addition to operating nine adult prisons,
has 38 juvenile facilities, including eight accredited high schools, and
21 pre-release facilities. In early June, the Arkansas Division of Youth
Services awarded Cornell a contract to take over a 134-bed youth facility.
Red Chip Review analyst Bryn Harmon said he foresees a steady earnings rise
for Cornell. The four analysts who follow Cornell expect, on average, earnings
of 89 cents per share for the year, up from 84 cents last year, and 18 cents
for the second quarter, compared with 23 cents.
NOT SO FAST
The prison operators respond by noting that the media
has paid more attention to their problems than those of public prisons. "We
may have disturbances periodically such as escapes and suicides,'' said
Wackenhut's Zoley. "But if you compare our incidents to any comparably sized
organization, we believe we come out well.'' "Our performance has been no
worse than what the public sector provides,'' said CCA's Ferguson.
Meanwhile, the Nebraska legislature is considering a
ban on building private prisons in the state, French food service giant Sodexho
Alliance S.A. (EXHO.PA) recently dumped its 8 percent share in CCA after
protests from its university clients. Industry leaders say they still have
something to offer the public, whether it builds a prison, clinic or psychiatric
hospital, saying it usually takes 12 to 18 months to build a facility while
it can often take the government up to three to five years. Back
to TOC. Humana to Pay $8M Settlement
One of the nation's largest health maintenance organizations will pay nearly
$8 million to settle allegations it charged Medicaid and Medicare for the
same services, Florida's attorney general said Thursday. Without admitting
wrongdoing, Humana (NYSE:HUM - news) Medical Plan Inc. also agreed to revise
its billing practices to ensure they don't double bill in the future.
An investigation by Attorney General Bob Butterworth's
office showed Humana received duplicate payments from Medicare and Medicaid
for the same people on a monthly, per capita basis from July 1, 1992 through
Dec. 31, 2000. "Public health care funding for patients eligible for both
Medicare and Medicaid should be borne by Medicare,'' Butterworth said.
Butterworth said Humana, which is based in Louisville, Ky., would reimburse
all funds it collected from Medicaid when compensation was also provided
through Medicare.
Medicare, the federally funded health care program for
the elderly, is run by the U.S. Health Care Financing Administration, which
pays a higher monthly amount to private managed health care companies such
as Humana for beneficiaries eligible to Medicare and Medicaid.
Back to TOC. Children's Comprehensive in Talks of Possible Sale
Children's Comprehensive Services Inc. which provides education and treatment
to troubled children, said on Friday it is in talks for a possible sale of
the company for more than $43 million in cash.
Children's Comprehensive, which has faced rising costs
and funding problems at its residential treatment centers, did not disclose
the buyer group. The company, which had previously announced it was evaluating
strategic alternatives, said the potential buyer has made a nonbinding proposal
to buy all outstanding shares for $6 each. Back to
TOC. LifePoint Hospitals Names Donahey New Chairman and Chief Executive Officer
The Board of Directors of LifePoint Hospitals, Inc. unanimously elected Kenneth
C. Donahey to serve as the Company's Chairman and Chief Executive Officer.
Mr. Donahey, age 50, will immediately fill the positions left open by the
recent death of James M. Fleetwood, Jr. DeWitt Ezell, Jr. has served as Interim
Non-Executive Chairman of the Company since Mr. Fleetwood's death. The Board
extends its sincere gratitude to Mr. Ezell for his leadership during the
interim period in which he served. Mr. Donahey is a seasoned executive with
24 years experience in the healthcare industry. He has served as LifePoint
Hospitals' Chief Financial Officer since the Company's inception when it
spun off from HCA - The Healthcare Company in May of 1999. In March 2001,
he was named as the Company's Executive Vice President and Chief Financial
Officer. Prior to joining LifePoint, Mr. Donahey served as Senior Vice President
and Controller of HCA. Mr. Donahey served HealthTrust, Inc. as its Senior
Vice President and Controller from its creation in 1987 until its merger
with HCA. Mr. Donahey first joined HCA in 1977.
LifePoint Hospitals, Inc. operates 21 hospitals in non-urban
areas. In most cases, the LifePoint facility is the only hospital in its
community. LifePoint's non-urban operating strategy offers continued operational
improvement by focusing on its five core values: delivering high quality
patient care, supporting physicians, creating excellent workplaces for its
employees, providing community value, and ensuring fiscal responsibility.
Headquartered in Brentwood, Tennessee, LifePoint Hospitals is affiliated
with over 6,000 employees. Back to TOC. |
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