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Abbey Healthcare Seeks Deal With Six Companies : Negotiations: The Costa Mesa company, which tried unsuccessfully in March to buy a competitor, aspires to become a leader in in-home services.

July 24, 1993|JAMES M. GOMEZ | TIMES STAFF WRITER

COSTA MESA — Abbey Healthcare Group Inc., which earlier this year lost a bid to take over a New England competitor, said Friday that it is negotiating with six other companies in an effort to establish itself as the nation's leading home health care company.

"We are going to do what we said we would do," said chief executive Timothy M. Aitken at Abbey's annual meeting. "That is, to build a business that is complementary to the changes that are taking place in health care."

Aitken said he will not identify any of the companies with which Abbey is negotiating until they "sign on the bottom line." But he said that the Costa Mesa company could secure a deal before year's end.

The announcement, however, did nothing to calm the jittery nerves of investors, who remain unsure about the future of many health care companies as long as the Clinton Administration is still pondering how to reform the nation's health care system.

Abbey, which on Thursday announced record second-quarter earnings, lost about 5% of its value on the NASDAQ market Friday, closing at $19.875 a share, down $1.25.

In March, Abbey tried unsuccessfully to buy Boston-based Lifetime Corp. At the time, Abbey officials said the acquisition would create a company offering "one-stop shopping" for services ranging from respiratory therapy to home nursing.

Abbey, with 1993 revenue of $248 million, specializes in providing home medical equipment and services for respiratory and rehabilitation therapy. What it lacks is a nursing staff to treat bedridden patients at home. The company had hoped to add nursing services by taking over Lifetime.

That is still Abbey's strategy, Aitken said Friday. "We will get into the nursing business in a very short time."

The company also announced that it will continue to pursue contracts with managed-care companies, such as health maintenance organizations and preferred provider organizations.

As the federal government struggles to put together a health care reform package that centers on managed care and price controls, Abbey officials said, the company would be best positioned for the future if it links up with more managed-care providers.

Experts say the home health care industry stands to be a major component of managed care because it helps patients avoid expensive hospital stays.

"There's nothing being said in Washington to tell us that home health care is going to slow down," said Steven T. Plochocki, Abbey's vice president of marketing and sales.

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