News in brief - Dec. 8, 2003

Pay up for physician executives - MedCath Corp. reports loss - Guidant, GE Medical form alliance - Symbion refiles IPO

Pay up for physician executives

Median compensation for physician executives increased 7% over the past two years, rising to $225,000 in 2002, according to a survey recently published by Cejka Search, a physician recruitment firm based in St. Louis, and the American College of Physician Executives.

Presidents and CEOs of single-specialty medical groups saw median compensation levels rise from $260,000 in 2000 to $300,000 in 2002, a 15.4% increase. Heads of multispecialty groups, on the other hand, saw only a 4.2% increase, from $240,000 in 2000 to $250,000 in 2002, according to the survey.

Median compensation levels rose the most for executives at insurance companies and hospitals. Chief medical officers at HMOs saw nearly a 30% jump, from $231,500 in 2000 to $300,000 in 2002, while associate or assistant medical directors at hospitals saw a 28.5% increase, from $165,000 in 2000 to $212,000 in 2002.

The survey also reports physician executives with MBA degrees earn significantly more than those who don't. Median compensation for a physician CEO with an MBA is about $350,000, compared with one with a master of health care administration degree, who makes about $300,000, the survey said.

MedCath Corp. reports loss

Charlotte, N.C.-based MedCath Corp., which develops and operates heart hospitals with acute care capabilities in partnerships with local physicians, reported a loss of just more than $62 million in the fourth quarter of 2003 and just more than $60 million for the year overall. That translated into a loss of $3.46 per share for the quarter and $3.35 per share for the year.

The company had reported income of nearly $1.4 million, or 8 cents per share, in the fourth quarter of 2002, and about $24.3 million, or $1.35 per share, for the entire year.

The company saw a loss despite a 30.7% increase in revenues between the fourth quarter of 2002 and 2003. MedCath reported revenues of $144.3 million during the fourth quarter this year, compared with $110.4 million during the same period last year.

MedCath blamed $58.9 million of the total loss on what officials called "the impairment of good will," which was a result of the company's transaction to go private in 1998. Other factors contributing to the loss were higher expenses for medical supplies, an increase of bad debt expenses and the normal expenses that go into opening new hospitals, company officials said.

Guidant, GE Medical form alliance

Guidant Corp. and GE Medical Systems have signed an agreement under which they will integrate data from Guidant's implantable cardiovascular devices into GE's electronic medical records systems.

Symbion refiles IPO

Symbion Inc., a Nashville, Tenn.-based firm that owns and operates surgery centers in 18 states, has filed documents with the Securities and Exchange Commission to raise $115 million in an initial public offering. The company, which pulled its IPO last April, plans to use the money to pay off debt and pay convertible preferred stockholders.