- Establishes Statewide Presence and Stronger Position in
Central Connecticut Market -
TRUMBULL, Conn., Dec. 21 /PRNewswire/ -- Oxford Health Plans, Inc.
(NYSE: OHP) has signed a definitive agreement to acquire MedSpan, Inc.,
Connecticut's first and only provider-sponsored managed healthcare
organization, for a cash consideration of approximately $19 million.
MedSpan's commercial statewide medical network services 74,525 commercial
members through more than 7,400 providers affiliated with 33 Connecticut
hospitals. MedSpan had total commercial HMO revenues of $106.8 million in
2000 and $95.7 million for the first nine months of 2001. The company's
principal subsidiary, MedSpan Health Options, Inc., is a licensed HMO that
provides all of MedSpan's full-risk and administrative services only (ASO)
products in Connecticut.
"Oxford has a great deal of interest in contiguously and strategically
expanding our presence in the Connecticut market with particular emphasis on
the central Connecticut market where we believe recent competitive dynamics
have opened up unique growth opportunities," Norman C. Payson, M.D., chairman
and chief executive officer of Oxford, commented. "Combining with MedSpan
will approximately double our membership in a strategic market that will
transform us from a niche player predominantly in Fairfield County to a
statewide presence."
"Oxford shares the same entrepreneurial spirit that has enabled each of us
to become healthcare leaders in the Connecticut marketplace," said Kevin
Kelly, CEO of MedSpan. "Oxford shares MedSpan's commitment to provide access
to the highest quality affordable healthcare for consumers while developing
innovative and flexible products that meet the ever-changing needs of
Connecticut's employers."
Service and benefits to MedSpan members will continue as usual without
interruptions during this transition. This transaction is expected to close
within 90 days and is not expected to have a material effect on Oxford's
financial condition or results of operations in 2002. Closing of the
transaction is subject to customary conditions including regulatory approvals.
Founded in 1984, Oxford Health Plans (http://www.oxfordhealth.com)
provides health plans to employers in New York, New Jersey and Connecticut,
through its direct sales force and through independent insurance agents and
brokers. Oxford's services include traditional health maintenance
organizations, point-of-service plans, third-party administration of
employer-funded benefit plans and Medicare+Choice plans.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release regarding matters that are not
historical facts are forward-looking statements (as such term is defined in
the Securities Exchange Act of 1934); and because such statements involve
risks and uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. Factors that could
cause actual results to differ materially include, but are not limited to:
-- Changes in Federal or State regulation relating to health care and
health benefit plans, including proposed patient protection
legislation and mandated benefits.
-- The state of the economy.
-- The impact of the September 11, 2001 terrorist attack and the recent
cases of Anthrax infection or exposure, and the effect of any future
acts of terrorism.
-- Rising medical costs or higher utilization of medical services,
including higher out-of-network utilization under point-of-service
plans and new drugs and technologies.
-- Competitive pressure on the pricing of the Company's products,
including acceptance of premium rate increases by the Company's
commercial groups.
-- Higher than expected administrative costs in operating the Company's
business and the cost and impact on service of changing technologies.
-- The ability of the Company to maintain risk transfer and other
provider arrangements and the resolution of existing and future
disputes over the reconciliations and performance under such
arrangements.
-- Any changes in the Company's estimates of its medical costs and
expected cost trends.
-- The impact of future developments in various litigation (including
pending class and derivative actions filed against the Company and
certain of its officers and directors, and other proceedings commenced
against the Company and several employees by certain healthcare
providers), the recent class actions in Connecticut and New York and
related litigation by the Connecticut Attorney General, regulatory
proceedings and other governmental action (including the ongoing
examination, investigation and review of the Company by various
Federal and State authorities).
-- The Company's ability to develop processes and systems to support its
operations and any future growth.
-- Those factors included in the discussion under the caption
"Business -- Cautionary Statement Regarding Forward-Looking
Statements" in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2000 and under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Cautionary Statement Regarding Forward-Looking
Statements" in the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 2001.
SOURCE Oxford Health Plans, Inc.
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Related links:
http://www.oxfordhealth.com
CONTACT:
Investors - Deborah Abraham, +1-914-467-3030,
or Gary Frazier, +1-203-459-7331, Media - Maria Gordon Shydlo,
+1-203-459-7674, all of Oxford Health Plans, Inc.
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