SEC Filings

AMSURG CORP filed this Form 10-Q on 08/14/1997
Entire Document
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       Twenty-three of the surgery centers in operation as of June 30, 1997,
perform gastrointestinal endoscopy procedures, five centers perform eye surgery
procedures, one center performs orthopedic procedures, one center performs
otolaryngology procedures and one center performs ophthalmology, urology,
general surgery and otolaryngology procedures. In addition, on January 1, 1996,
the Company acquired a 70% interest in the assets of a gastroenterology and
primary care physician practice associated with a surgery center in which the
Company already held an ownership interest. On January 1, 1997, the Company
acquired a 60% interest in the assets of a urology practice and currently has a
surgery center under development with this same practice. The other partner in
each of the two physician group practice partnerships is an entity owned by the
principal physicians who provide professional medical services to patients of
the practice. All third party payor contracts under which the two physician
group practices provide professional services are entered into by the group
practice in which the Company is the general partner and owns a majority

       The start-up specialty physician networks are owned through limited
partnerships and limited liability companies. The Company owns a majority
interest in these entities, and the other partners are individual physicians who
will provide the medical services to the patient population covered by the
contracts the network will seek to enter into with managed care payors. It is
not expected that the specialty physician networks in themselves will be a
significant source of income for the Company. These networks were and will be
formed primarily as a contracting vehicle to generate revenues for the Company's
practice-based surgery centers and physician practices. These networks have not
generated any revenues to date. As of June 30, 1997, the Company had established
three specialty physician networks, located in the south Florida market, in
Knoxville, Tennessee and Montgomery, Alabama.

       The Company intends to expand primarily through the development and
acquisition of additional surgery centers in targeted surgical specialties. In
addition, the Company believes that its surgery centers, combined with its
relationships with specialty physician practices in the surgery centers'
markets, will provide the Company with other opportunities for growth from
specialty network development that, if appropriate, may include the acquisition
of specialty physician practices. By using its surgery centers as a base to
develop specialty physician networks that are designed to serve large numbers of
covered lives, the Company believes that it will strengthen its market position
in contracting with managed care organizations.

       While the Company generally owns 51% to 70% of the entities that own the
surgery center or physician group practice, the Company's consolidated
statements of operations include 100% of the results of operations of the
entities, reduced by the minority partners' share of the net income or loss of
the surgery center/practice entities.

       The Company's sources of revenues are as follows:

                                         THREE MONTHS ENDED        SIX MONTHS ENDED
                                               JUNE 30,                JUNE 30,
                                         ------------------        ----------------
                                          1997        1996         1997        1996
                                          ----        ----         ----        ----
       <S>                                 <C>         <C>         <C>         <C> 
       Surgery centers                      80%         80%         80%         82%
       Physician practices                  17          17          17          15
       Management fee                        1           2           1           1
       Interest and other                    2           1           2           2
                                           ---         ---         ---         ---
           Total                           100%        100%        100%        100%
                                           ===         ===         ===         ===

       The facility fees and fees for physician services received by the
Company's surgery centers and physician practices are generally paid by third
party reimbursement programs, including governmental and private insurance
programs. The Company derived approximately 34% and 36% of its revenues in the
six months ended June 30, 1997 and 1996, respectively, from governmental
healthcare programs including Medicare and Medicaid.