Florida company aims to spend $300 million for physician practices
■ Mednax is making plans for a major buying spree after a slowdown in 2011.
Anesthesiologists and subspecialty pediatricians who own their practices but want to sell may find an interested buyer in a practice management company.
Mednax, based in Fort Lauderdale, Fla., spent $161.4 million buying up 10 of these kinds of medical practices in 2011 but expects to shell out about $300 million in 2012. One-third of this money will be invested in practices to become part of the Pediatrix Medical Group division. Two-thirds will go to practices that will merge into the American Anesthesiology division. Mednax has practices in 33 states.
"We will continue to grow through acquisition," said David Parker, Mednax's vice president of investor relations and corporate communications.
When Mednax buys a practice, physicians may be employed by an affiliated professional organization or employed directly, depending on the relevant national and state laws regarding the corporate practice of medicine. The management company runs the practice, owns the contracts and takes in payment for services provided by affiliated physicians.
Acquisition is improving Mednax's finances. The company earned $1.19 per share for the fourth quarter of 2011, an increase from the $1.12 earned in the fourth quarter of 2010 and the $1.07 earned in the fourth quarter of 2009. Revenue grew 9.9% in the fourth quarter of 2011 compared with the same quarter in 2010, and operating income went up 6.6%.
The company had indicated that it intended to spend about $100 million in 2011 to acquire neonatal, maternal-fetal, pediatric cardiology and other specialty practices caring for children and infants. The amount of money due to be spent on anesthesia practices was not announced. Mednax is not buying primary care or general pediatric practices right now, but it did expand into pediatric surgery in 2011 and may stretch into other, related areas.
The expected spending for 2012 puts Mednax's acquisition plans on par with two years ago. Mednax spent $343 million in 2010 acquiring 15 practices and $151.3 million in 2009 purchasing 11 practices.
Those with the company say the slowdown in purchasing for 2011 was primarily because it was trying to acquire a greater number of anesthesia practices. These tend to be larger than pediatric specialty practices, and the deals take more time to complete.
The company is eyeing participation in various aspects of health system reform and is in discussions with several institutions about some form of an accountable care organization.