Spokane Journal of Business

Health-care chain has big plans

HealthSouth soon will have15 therapy clinics here, may add imaging to local holdings

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HealthSouth Corp., a fast-growing, Birmingham, Ala.-based health-care provider is entering the Spokane-area market in an aggressive way, with recent acquisitions and future plans.

The big, 13-year-old company, whose main line of business is a national chain of physical-therapy clinics, has acquired three such clinics here in the last 10 months, is in the process of buying 10 more now, and expects to be operating 15 Spokane-area therapy clinics by the end of the year.

HealthSouth, which employs 38,000 people nationally, also has acquired a 50 percent stake in the Valley Medical Outpatient Surgery Center here, and includes in its long-range plans the possibility of operating one or more diagnostic imaging centers here, says Steve Schaffer, the companys Spokane-area administrator.

Nationally, the company has begun developing what it calls an integrated service model, which involves complementing its rehabilitation- and occupational-medicine clinics with outpatient surgery centers and diagnostic imaging centers in metropolitan areas that have populations of 100,000 people or more, Schaffer says. He adds that HealthSouth has that in mind for Spokane, too.

HealthSouth bought a half-interest in Valley Medical Outpatient Surgery Center here last year, from an investment group of physicians. Its partner in the center is Valley Hospital & Medical Center, which is owned by Empire Health Services, of Spokane. HealthSouth now manages the facility for the hospital.

The Alabama company first entered the Spokane market last May, when it bought Graebel & Associates, one of Spokanes largest industrial-rehabilitation clinics. Graebel, which now is operated as HealthSouth Rehabilitation Center of Spokane, is located at 3927 E. Trent and specializes in helping patients who have sustained work-related injuries get back to work, Schaffer says.

Last August, HealthSouth bought another Spokane rehab clinic, VanPatten & Associates, at 203 E. Dalke, and later bought Pines Valley Physical Therapy, at 13102 E. Mission. Both clinics still specialize in general orthopedics, he says. Those clinics, too, now operate under the HealthSouth Rehabilitation Center of Spokane name. The three HealthSouth clinics employ a total of 30 people.

Meanwhile, HealthSouth has announced plans to acquire all of Eagle Rehab Corp.s nine Spokane-area clinics, says Marti Sandoval, a Spokane-based director of marketing for Eagle Rehab. In an agreement signed last month, HealthSouth agreed to acquire Eagle Rehabs parent, Horizon/CMS Healthcare Corp., of Albuquerque, N.M. The sale, which is valued at about $1.6 billion, still is subject to regulatory approval, but is expected to close by June 1, Sandoval says.

Eagle Rehab, itself, had entered the Spokane market just two years ago, when it acquired Spokane Sports & Orthopedic Therapy and Spokane Associated Physical Therapists, which together operated the nine clinics in the Spokane area HealthSouth now is buying in the Horizon/CMS deal. Eagle Rehab had been based in Seattle at the time it entered the Spokane market, but was acquired by a unit of Horizon/CMS Healthcare last year.

HealthSouth also currently is negotiating to buy another Spokane rehabilitation clinic, which would give it 13 clinics here by June. Schaffer declines to disclose which Spokane clinic the company is trying to acquire, but says the acquisition would enable HealthSouth to expand its sports medicine services here. He says he expects the sale to be completed within the next two weeks.

HealthSouth typically acquires independently owned and operated clinics that offer rehabilitative services, Schaffer says. After a clinic has been acquired, the former owner usually is asked to stay on in some type of management position. He says that depending on a facilitys size, HealthSouth will spend anywhere from $40,000 to $150,000 to upgrade a clinics equipment and quarters.

Schaffer contends that HealthSouth receives more than 10 inquiries a week nationwide from clinics interested in selling out to the national chain.

Schaffer claims that businesses are interested in being acquired by HealthSouth because of the difficulty of staying competitive in the rehabilitation-therapy market. They experience better success by joining a larger network, he says.

HealthSouth strives to educate communities about fitness and nutrition. It has teamed up with a division of Time Warner Productions to produce a magazine on health-care issues. That publication is expected to hit newsstands in May, and HealthSouth believes it will have a circulation of 1 million by the end of its first year, Schaffer says.

In Spokane, the company has rented the Spokane Veterans Memorial Arena for four days next month to host a traveling educational program for school children here. The program, which is co-sponsored by HealthSouth and Coca-Cola Co., brings in 40 professional athletes and Olympians to stress the importance of nutrition and exercise programs, staying in school, staying off of drugs, and staying out of gangs, Schaffer says.

HealthSouth also is working on airing a Saturday morning television.

HealthSouth, which was founded in 1984, owns 800 outpatient rehabilitation facilities and operates in all 50 states. The company expects to double its current work force to about 80,000 this year.

  • Lisa Harrell

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