Report: Oxford Health Boss Is Out
NEW YORK (AP) _ Stephen F. Wiggins is expected to step down as chairman of Oxford Health Plans Inc. as part of a financial rescue plan for the managed health care concern, published reports said today.
The Wall Street Journal said the resignation of Oxford’s founder is part of a package under which Texas Pacific Group and the buyout specialists Kohlberg Kravis Roberts & Co. will invest $700 million in Oxford.
The newspaper said the Oxford is also about to report a fourth-quarter loss of more than $200 million _ well above the $120 million deficit Oxford had forecast just two months ago.
A call to Oxford was not immediately returned.
Under the rescue plan, the newspaper said Wiggins will remain as a director, but another director will be named interim chairman.
It said Norman Payson, former chief executive officer of Healthsource Inc., is the leading candidate to be named chief executive officer of Oxford.
The newspaper, citing unidentified people familiar with the transaction, said the deal would give the investor group a nearly 20 percent stake in the company for roughly $350 million. The rest of the package is coming as debt.
It said Oxford declined to comment.
Wiggins, who is now 41, founded the company in his home’s second bedroom in the mid-1980s, intent on bringing managed care to upscale doctors and consumers in metropolitan New York.
Oxford was the first HMO to offer its own network of chiropractors, massage therapists and other so-called alternative providers.
Between 1993 and 1997, the company grew from 217,000 to nearly two million members. But its costs also climbed.
Oxford reported its first loss as a public company in October and its stock price fell about 60 percent. It still hasn’t recovered. On Friday, Oxford shares ended at $20.1875 in trading on the Nasdaq Stock Market.