Wednesday, March 19, 1997 | 11:59 a.m.
The on-and-off-again merger of Las Vegas-based Sierra Health Services and embattled Physician Corp. of America is off -- permanently.
Workers' compensation losses piled on top of regulatory objections Tuesday to kill the merger intended to form the nation's eight-largest publicly held managed care company.
Sierra officials ended weeks of speculation that the deal was dead by citing the Florida insurer's $250 million workers' compensation losses as an insurmountable obstacle to the merger.
"We were hoping to agree on a transaction that was in the best interests of our shareholders," said Sierra Chairman and Chief Executive Officer Anthony M. Marlon, M.D. "After a thorough evaluation, however, we could not find a satisfactory alternative."
Sierra management has been re-evaluating the proposed merger since Feb. 26, when Physician Corp. projected the $250 million loss.
The losses came largely from four self-insured funds bought by Physician Corp. in 1995 and now considered insolvent by state insurance regulators.
Marlon said the losses represented "a material adverse event under the conditions of the original agreement."
Sierra serves more than a half million people in Nevada and Texas through health maintenance organizations, known as HMOs, and other managed-care programs.
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