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California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

BUSINESS BRIEFS: FPA/AHI SYSTEMS, UNITED HEALTHCARE CORP.

      FPA MEDICAL MANAGEMENT, a physician practice management
company, announced yesterday an agreement to acquire Downey, CA-
based AHI HEALTHCARE SYSTEMS, INC. in a $130 million stock
transaction. The deal, expected to close early next year, will
augment FPA's primary care physician network. Following this
acquisition and another deal with Foundation Health Corporation,
FPA's anticipated annual revenue for 1997 is $1 billion (WALL
STREET JOURNAL, 11/12).
Minneapolis, MN-based UNITED HEALTHCARE CORP., one of the
largest HMOs in the country, is preparing to enter the "already-
crowded" San Francisco market, SAN FRANCISCO BUSINESS TIMES
reports. United will launch a Medicare HMO in the Bay Area by
early 1997; introduce its Open Access option, which gives HMO
enrollees direct access to specialists, also by next year;
explore a number of potential West Coast mergers and
acquisitions; and ask for state Department of Corporations
permission to expand basic HMO service to several Northern
California counties. United currently has about 275,000
enrollees in the region, but less than 10% are HMO members
(Rauber, 11/11).
Columbus, OH-based U.S. HEALTH CORP. announced that it will
begin marketing its HMO, HealthPledge, to the business community.
The HMO, which now covers 6,500 people, aims to enroll "at least
100,000 people to achieve the critical mass of members needed to
make the system run most efficiently." Participating physicians
own half of the HMO (Selis, BUSINESS FIRST OF COLUMBUS, 11/11).
West Palm Beach-based PHYMATRIX CORP., an integrated
physician practice management company, announced yesterday that
it had agreed to "provide consulting services to HEALTH INSURANCE
PLAN OF NEW JERSEY" (HIP). HIP was the first group model HMO on
the East Coast and has 205,000 enrollees in New Jersey.
PhyMatrix also announced that it signed letters of intent with 70
physicians to expand its work force (PhyMatrix release, 11/11).
Nashville, TN-based ORNDA HEALTHCORP. "is ready to negotiate
a merger with HealthPartners of Southern Arizona," according to
THE BUSINESS JOURNAL OF PHOENIX. Officials from HealthPartners
said that they "trust[ed]" OrNda "to create economies of
operation and lower the cost of delivering care on its own"
(Gonzales, 11/11).





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