BUSINESSAfter sell-off, PhyCor may be heading toward extinctionThe once-mighty physician practice management company, long in decline, says it has sold its last company-owned clinic assets and may face bankruptcy.By Cheryl Jackson, amednews staff. May 28, 2001. When PhyCor Inc. bought physician practice assets, it had doctors sign a 40-year deal for the company to manage the practices. But the company itself may die after barely reaching its teen years. In an April 17 Securities and Exchange Commission filing, PhyCor reported that it had sold the last of its multispecialty clinics and planned to sell most of its IPA business within the next few months. The company plans to use the money to pay debt. It said it missed a $4.4 million bond interest payment in February, and might have to file for bankruptcy -- a last gasp for a leader of an almost dead industry. "Them seeking protection would not come as a surprise to anybody," said Todd Richter, an analyst at Banc of America Securities who had followed PhyCor. "They are the last company in that space of their era that hasn't sought protection. "They operated a flawed business model. It's difficult for a company to do well at the expense of its doctors," he added. PhyCor executives did not return phone calls seeking comment. After having some heady early days, PhyCor in the last four years crashed to earth, landing in a sea of lawsuits and defections by practices it once bought. For example, as PhyCor was telling the SEC that it might have to file for bankruptcy, doctors at the Medical Arts Clinic in Corsicana, Texas, were preparing to observe the one-year anniversary of locking out the physician practice management firm as its doctors tried to break their deal with the Nashville, Tenn.-based company.
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Copyright 2001 American Medical Association. All rights reserved.
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