PhyCor seeks stake
in Maui Medical Group

The Nashville
medical management firm
would become a partner

By Rick Daysog
Star-Bulletin

PhyCor Inc. is negotiating to become a partner in the Maui Medical Group, one of the Valley Isle's largest health clinics.

The Nashville, Tenn.-based medical management company, which merged with Straub Clinic & Hospital Inc. last year, wants to acquire an interest in Wailuku-based Maui Medical and take over its management duties, said Dr. Bill Mitchell, Maui Medical's president.

"Basically, they're buying into the practice, Mitchell said.

The value of the deal was not disclosed. But Mitchell said that PhyCor would inject new capital into the company and would acquire some hard assets such as equipment and furniture.

The transaction will not involve Maui Medical's real estate holdings, which include a 40,000-square-foot clinic in Wailuku and a 5,000-square-foot office in Lahaina, Mitchell said.

The 31 physicians who own Maui Medical likely will vote on the deal next month.

PhyCor could not be reached for immediate comment.

Founded in 1965, Maui Medical is one of the largest health care providers on Maui with about 40,000 patients and about 280 employees, Mitchell said.

The company has been profitable but needed a partner given major changes in the nation's health care industry, Mitchell said.

The PhyCor alliance will not only give Maui Medical access to cheaper capital and stronger management but it also will allow the company to negotiate better deals with health insurance carriers like HMSA, he said.

Mitchell noted that Maui Medical physicians will continue to control the company's medical practice policies.

PhyCor is a medical management company that operates 45 clinics with 3,070 physicians in 26 states. The company reported revenues of $766.3 million in 1996.