Ailing MedPartners to Fire 45 Doctors, Cut Pay

Signaling continuing turmoil in its Southern California operations, MedPartners Inc. said that it will fire 1,045 employees, including 45 doctors, as the company tries to return to profitability.

MedPartners, the nation’s largest manager of physician groups, also said that 950 Southern California doctors have agreed to accept a temporary 7% pay cut.

MedPartners physicians provide medical care for 1.3 million Southern Californians through the Mullikin, Friendly Hills, Talbert and other medical groups. Most of those patients are in HMOs and other managed-care plans.

The latest round of layoffs--announced to employees Thursday--follows the firings of 600 MedPartners workers in Southern California, including 120 doctors, in October. The company has 9,500 workers overall in the region.

The physician layoffs and pay cuts come at a time when many HMOs are seeking their largest increases in medical premiums from employers in years. In some cases, managed-care plans are seeking double-digit price hikes.

The Birmingham, Ala.-based firm is attempting to regain its footing after reporting a startling $840-million fourth-quarter loss in March. Last week, the company reported a net loss of $25.7 million for the first quarter of 1998.

The company has attributed much of its financial woes to its difficulties controlling costs in Southern California after several large acquisitions. Other managed-care companies across the nation have also run into financial problems, which they blamed on unexpectedly high medical costs.

Another large physician practice firm, San Diego-based FPA Medical Management, is expected to report its first-quarter results today. There has been industry speculation that FPA will report a sizable loss.

MedPartners shares fell 38 cents to close at $9.75 on the New York Stock Exchange. FPA shares rose 38 cents to $11.50 on Nasdaq.

Joel Weiden, a MedPartners spokesman, said patients whose physicians are fired will be “transitioned” to other doctors.