Exhibit 99(a)
For More Information:
Laurie Scarborough
Investor Relations
502/580-1037
E-MAIL: lscarborough@humana.com
Greg Donaldson
Public Affairs
502/580-3683
E-MAIL: gdonaldson@humana.com
TARGETING GROWTH, HUMANA ANNOUNCES ACQUISITION OF
PHYSICIAN CORPORATION OF AMERICA
Combination Establishes Humana As Health Services Powerhouse
Gains Immediate Leadership Position In Important Texas And
Florida Markets
Company Foresees Significant Synergies, Cost Savings From
Combined Operations
LOUISVILLE, KY (June 3, 1997) --- Targeting growth and
critical mass in its core Florida and Texas markets, Humana Inc.
(NYSE: HUM) announced today that the company signed a definitive
agreement to acquire Physician Corporation of America (Nasdaq:
PCAM) for $7 per share plus the assumption of $130 million in
debt, for a total consideration of approximately $400 million in
cash. Physician Corporation of America (PCA), with 1.1 million
members, provides comprehensive health care services through its
health maintenance organizations in Florida, Texas and Puerto
Rico.
As a result of the transaction, Humana will have approximately
six million members and over $8 billion in annual premiums.
"This acquisition represents a compelling strategic opportunity
that strengthens our competitive position in Florida and Texas,
with all of the critical mass and purchasing power that is
absolutely critical for long-term leadership in our industry,"
said David A. Jones, Chairman and Chief Executive Officer of
Humana.
Gregory H. Wolf, Humana's President and Chief Operating
Officer, added, "Having implemented an aggressive program of
operating improvements since the middle of last year -- all
aimed at making our service second-to-none in the industry -- we
are now poised to seize opportunities in a consolidating
marketplace, broaden our product line and pursue accelerated
growth. We are confident that we can obtain immediate synergies
and cost savings through the acquisition of PCA, and that it
will be a meaningful contributor to our earnings growth in the
future."
By joining forces with PCA, Humana will broaden and deepen its
competitive position in both Florida and Texas. Humana
currently has 1.1 million members in Florida, and PCA will bring
324,000 new members including a strong base in Northern Florida.
In Texas, PCA has 323,000 members which, added to Humana's
337,000 members, will give the combined companies about 660,000
members, making it one of the largest managed care organizations
in Texas. PCA brings established positions in such key Texas
cities as Austin and San Antonio. In addition, PCA has 491,000
members in Puerto Rico.
Humana's current products include commercial, Medicare risk,
and CHAMPUS (Civilian Health and Medical Program of the
Uniformed Services) and, with the acquisition of PCA, it will
gain almost 600,000 Medicaid members. The company believes that
it will now be well positioned in the Medicaid market as federal
and state governments continue to turn to the private sector to
improve the quality and efficiency of government-funded medical
programs.
Commenting on the Florida transaction, Douglas Cook, Director
of the Florida Agency for Health Care Administration, said: "I
look forward to partnering with one of the largest HMOs in
Florida in the delivery of health care services to Medicaid
recipients. Humana has been our best partner in the Community
Health Purchasing Alliances in the delivery of quality health
care to small business. Humana has a commitment to and history
of high-quality health care and customer service."
The acquisition comes during a period in which Humana has
undertaken a major program to reinvent its customer service and
underscore its commitment to quality and patient care. Among
other improvements, Humana has introduced HumanaFirst, a 24-hour
health information hotline, streamlined physician referrals, and
expanded member access to customer service representatives in
the evenings and weekends. Additionally, just last week, Humana
introduced a new family of commercial health plans --
"HumanaFreedom" plans -- offering more flexibility to HMO
members who wish to access medical services outside of the
existing provider network.
"From my perspective, this acquisition offers an ideal
combination of long-term growth and synergistic benefits. It is
an excellent fit," said Wolf, who added: "Our vision is to
improve the health of every one of our members. It is very
exciting for us to have an opportunity to bring our commitment
to service and caring to these new members of the Humana family."
The transaction is subject to certain customary conditions,
including various insurance regulatory approvals and approval of
PCA's stockholders.
Humana, headquartered in Louisville, Ky., is one of the
nation's largest publicly-traded managed health care companies
with more than 4.7 million health plan members primarily located
in 17 states. Humana offers coordinated health care through a
variety of delivery systems -- health maintenance organizations,
preferred provider organizations, point-of-service plans,
administrative services products and medical savings accounts --
to employer groups, government-sponsored plans and individuals.
More information about Humana is available on the Internet at
http://www.humana.com.
This press release contains forward-looking information.
The forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements may be significantly impacted
by certain risks and uncertainties described in Humana's Annual
Report on Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 1996.
HUMANA INC.
PHYSICIAN CORPORATION OF AMERICA
FACT SHEET
Humana PCA Combined
Premiums
(Latest 12 months) $6.9 billion $1.3 billion $8.2 billion
Medical Membership at March 31, 1997:
By State --
Florida 1,128,500 324,200 1,452,700
Texas 336,800 323,100 659,900
Other 3,302,800 490,900 (a) 3,793,700
4,768,100 1,138,200 5,906,300
By Product --
Commercial 2,577,800 480,400 3,058,200
Medicaid 53,200 597,600 (a) 650,800
Medicare risk 374,200 60,200 434,400
CHAMPUS 1,103,100 -- 1,103,100
Medicare supplement 93,500 -- 93,500
Administrative services 566,300 -- 566,300
4,768,100 1,138,200 5,906,300
(a) Includes approximately 142,000 Medicaid members effective
April 1, 1997.