SEC Filings

10-12G/A
AMSURG CORP filed this Form 10-12G/A on 05/21/1997
Entire Document
 
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                       BUSINESS OF AHC AFTER DISTRIBUTION
 
     After the Distribution, AHC will no longer own any AmSurg Common Stock and
accordingly its principal business operations will be conducted through DTCA,
which is the leading provider of diabetes management services. The principal
source of revenues for DTCA historically have been its operating contracts for
hospital-based diabetes treatment centers. While during the last several fiscal
years, revenues from this business have been adversely affected by termination
and renegotiation of certain hospital contracts, AHC believes this business is
stabilizing and expects it to be a source of steady revenue for AHC.
 
     During 1994 AHC began to implement a business strategy in DTCA to develop
comprehensive diabetes disease management products for a new customer group, the
managed care industry, and AHC believes that the substantial portion of its
future revenue growth will result from comprehensive healthcare management
contracts with managed care payors for their enrollees with diabetes. In
furtherance of this strategy, during the last two fiscal years, AHC has incurred
substantial expenditures associated with these comprehensive diabetes disease
management efforts.
 
     AHC's growth strategy is primarily to develop new relationships directly
with payors and others who are ultimately responsible for the healthcare costs
of individuals with diabetes and to further develop its hospital-based diabetes
treatment center business. Pursuant to the strategy with payors, DTCA is
expected to provide management services designed to improve the quality of care
for individuals with diabetes while lowering the overall cost of care. DTCA fees
under these agreements with payors may take the form of shared savings of
overall diabetes enrolled healthcare costs, capitated payments to DTCA that
cover DTCA's services to enrollees but do not include responsibility for
enrolled healthcare claims or some combination of these arrangements. AHC
believes that its current position as the leading provider of diabetes treatment
services to hospitals and physicians will be an advantage in comparison with
other potential competitors or with the payors considering initiating such
services themselves, most of whom have no such actual diabetes treatment or
comprehensive diabetes population management experience.
 
     Since January 1996, DTCA has entered into ten managed care contracts
primarily with Principal Healthcare, Inc. and Health Options, Inc., an HMO
subsidiary of Blue Cross Blue Shield of Florida. DTCA is in the process of
implementing its diabetes disease management products pursuant to these
agreements and through its implementation expects to produce cost savings which
will be shared by DTCA and the HMOs. While DTCA believes that these agreements
will provide substantial revenue and profit opportunities for DTCA over the five
year term of these agreements, it cannot accurately predict the amount or timing
of these revenues or profits or assure that any such revenue or profits will be
obtained. See "RISK FACTORS -- Risk Factors Regarding AHC After Distribution."
 
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