Roger J. Medel, M.D.
MEDNAX has confirmed that it has been reviewing strategic alternatives for its radiology medical group, MEDNAX Radiology Solutions. Prior to the onset of the COVID-19 pandemic, MEDNAX had been in advanced discussions to divest this organization and plans to move forward with a divestiture, when market conditions are appropriate. MEDNAX intends to apply the proceeds from a sale of MEDNAX Radiology Solutions towards debt reduction.
As part of the Company’s 2020 financial expectations that MEDNAX provided prior to the impact of the COVID-19 pandemic, MEDNAX Radiology Solutions was expected to contribute approximately $550 million and $90 million in revenue and Adjusted EBITDA, respectively, to the Company’s operating results for the year. In accordance with GAAP accounting, operating results for MEDNAX Radiology Solutions will continue to be reported as part of MEDNAX’s continuing operations at this time.
MEDNAX does not intend to provide further public comments on this strategic alternatives process.
As previously disclosed, during the 2020 second quarter to date, MEDNAX’s operations have been significantly impacted by reductions in patient volumes and revenue as a result of the COVID-19 pandemic. However, the Company’s operations began to normalize in an accelerating fashion during the month of May.
In the Company’s radiology services medical group, during the month of April, study volumes declined by approximately 50 percent versus the prior year. On a preliminary basis, the Company estimates that study volumes declined by approximately 30 to 35 percent during the month of May, with those declines lessening to approximately 25 percent by the end of the month. In the Company’s office-based women’s and children’s medical groups, during the month of April, patient volumes declined by approximately 25 percent versus the prior year. On a preliminary basis, the Company estimates that during the month of May, patient volumes declined by approximately 10 to 15 percent versus the prior year, with those declines lessening to approximately 10 percent by the end of the month. Finally, the Company estimates that aggregate patient volumes in its hospital-based pediatric medical groups, including neonatology and neonatology-related services, pediatric intensive care, and other pediatric services, experienced only minor, single-digit percentage declines through the months of April and May.
In total, the Company estimates that the reduction to consolidated revenue as a result of these declines in patient volume during the month of May, as compared to the prior year, was in the range of approximately 10 to 15 percent. During the month of April, the Company estimates that this impact was approximately 25 percent.
As previously announced, MEDNAX implemented a number of actions to preserve its financial flexibility and partially mitigate the significant impact of COVID-19 on the Company. MEDNAX and its affiliated practices have also received, and expect to receive, certain funds available to healthcare providers under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).
MEDNAX, Inc., a leading health solutions partner specializing in prenatal, neonatal, pediatric, and radiology services, has also announced a number of further steps it is taking as part of its aggressive transformational activity to position the Company for long-term, sustainable growth.
As also previously announced, since 2018 MEDNAX has been conducting a comprehensive review of its businesses. In that time, the MEDNAX Board of Directors and management team have taken decisive strategic and financial actions to position the Company for the future, including implementing significant operational improvements and efficiencies; leveraging the insights of leading consultants; selling MedData; selling its American Anesthesiology medical group; and enhancing its organizational and leadership structure to align with a refocused business model.
The MEDNAX Board of Directors and management believe that continuing to implement the Company’s strategic priorities and reorienting the Company as a dedicated, streamlined pediatrics and obstetrics business will provide the greatest near- and long-term benefits for all of its stakeholders. Accordingly, MEDNAX intends to return to its original company name, Pediatrix Medical Group, Inc., pending approval by the Company’s shareholders at its 2020 annual meeting in August. The Company will continue trading under its current ticker symbol (NYSE: MD).
“The initiatives we are outlining today signify our return to our roots as a leading provider of women’s and children’s care, and are a culmination of our efforts to concentrate on our core practice areas and refine our strategy for growth and profitability,” said Roger J. Medel, M.D., (pictured above) Chief Executive Officer of MEDNAX. “As Pediatrix Medical Group, we will become an organization wholly dedicated to women’s and children’s services, and one that will continue to drive innovations to improve the quality and experience of patient care for years to come.”Back To Top
MEDNAX to Sell Off Radiology Solutions. Appl Radiol.