Fighting Declining Revenues, MedCath Considers Selling Off More Facilities

After selling off two hospitals since September, MedCath Corp. has created a strategic options committee to consider spinning off more hospitals or other assets, according to a release from MedCath.

In February the company reported declining revenues in the first quarter of 2010, blaming a declining volume of heart surgeries as a key factor. But MedCath, which made its name in cardiovascular services, reported growing revenues from non-cardiovascular cases and its new 70-bed acute care hospital in Kingman, Ariz.

The company sold Sun City (Ariz.) Cardiac Center Associates to Banner Health in September and is now selling Heart Hospital of Austin (Texas) to St. David's HealthCare.

In addition to running nine heart hospitals, at last report, MedCath owns or manages about 20 facilities treating cardiac and sleep disorders, leases mobile cardiac catheterization labs and provides physician practice management services to heart specialists.

The new strategic options committee is made up of board members and will be advised by Navigant Capital Advisors, "to assist the committee in exploring the possibility of selling some of the company's assets," the release said.

"MedCath has long been recognized for superior cardiovascular clinical results, but those capabilities now extend beyond heart care and include a growing number of high acuity services," according to a corporate profile posted on its Web site. "That diversification — which already accounts for more than 20 percent of our business — is part of a strategic plan designed to allow MedCath to reach a level of broad-based, consistent growth that will continue to grow heart care but will grow other hospital services more exponentially over the next two years."

Read the release on the MedCath strategic options committee.