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Originally Posted at: http://biz.yahoo.com/prnews/981102/tx_sierra__1.html
Sierra Health Subsidiary Completes Purchase of Kaiser Southwest; Texas Health Choice Will Be New Name
DALLAS, Nov. 2 /PRNewswire/ -- On October 31, 1998, HMO Texas, L.C., a subsidiary of Sierra Health Services, Inc. (NYSE: SIE - news), completed its asset purchase of Kaiser Foundation Health Plan of Texas and the Permanente Medical Association of Texas.
In concert with the transaction's closing, HMO Texas changed its name to Texas Health Choice, L.C. and will market its health plans in Houston and the Dallas-Fort Worth Metroplex under that name. The medical group will provide care under the name The Medical Group of Texas.
``We're pleased that the transaction was completed on
Sierra Chairman and Chief Executive Officer Anthony M. Marlon, M.D.
it's time to implement our plan for making the Dallas operation
We hope to realize approximately $38 million in immediate savings from
a decrease in corporate overhead allocations, various administrative
reduced medical malpractice costs and other areas.''
Dr. Marlon added that the company is assuming no prior liabilities for malpractice or other litigation, or for any unanticipated future adjustments to claims expenses for periods prior to closing. The $124-million acquisition, which was first announced May 29, 1998, is expected to be accretive to Sierra's earnings by year-end 1999.
Over the next six months, the company plans to further improve performance by launching a Medicare risk product, opening the medical group to customers outside the health plan, negotiating more competitive laboratory contracts, installing new information systems that streamline claims processing and other operations, and expanding the health plan's physician network by contracting with additional private practice physicians.
``We are already negotiating with independent practice associations which we plan to offer in tandem with The Medical Group of Texas to create a mixed-model delivery system,'' said Larry S. Howard, President of Texas Health Choice. ``By supplementing the medical group with additional private-practice physicians, we will be able to attract new members who may have found the exclusive Kaiser network limiting.''
Mr. Howard added that current Kaiser members should not experience an interruption of services. ``We have also acquired the nine Kaiser medical offices. Nearly all of Kaiser's primary care physicians will remain employed by The Medical Group of Texas, so most members will retain their doctors.''
Texas Health Choice, L.C. (formerly HMO Texas, L.C.) is a health plan serving nearly 25,000 commercial and Medicare members in the Houston metropolitan area. Its parent, Sierra Health Services, Inc. is a diversified health care services company based in Las Vegas. Its subsidiaries include health maintenance organizations, indemnity health and workers' compensation insurers, a multi-specialty medical group and a military health services company.
Statements in this news release that are not historical facts are forward-looking and based on management's projections, assumptions and estimates; actual results may vary materially. Forward-looking statements are subject to certain risks and uncertainties, which include but are not limited to: 1) the effective integration of this acquisition and the economic impact of the company's expansion program; 2) competitive forces that may effect pricing and enrollment; 3) unpredictable medical cost inflation; 4) adverse government regulation and litigation. Further factors concerning risks and results can be found in documents filed with the Securities and Exchange Commission.
SOURCE: Sierra Health Services, Inc.