MEDCATH SHIFTS ITS STRATEGY IN WAKE OF SPECIALTY HOSPITAL MORATORIUM
By Beth Mattson-Teig
Thomas K. Hearn III
Prior to late 2003, many hospitals across the country probably viewed Charlotte, N.C.-based MedCath Corp. (Nasdaq: MDTH) as the enemy – a major competitor to their cardiovascular services.
These days, however, MedCath is hoping some of those same hospitals take a second look at the company – now as a potential partner.
MedCath’s core strategy of building freestanding for-profit specialty hospitals with physician partners came to a screeching halt when President Bush signed the Medicare Prescription Drug, Improvement and Modernization Act, which became effective in December 2003. Included was an 18-month moratorium that, in effect, put a stop to the new construction or expansion of specialty hospitals with physician ownership.
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