SELECT MEDICAL CORP. /Mechanicsburg, Pennsylvania Hospital Firm Tries To Separate From The Pack.(THE NEW AMERICA)

Byline: Gloria Lau

Plenty of hospital companies have come and gone in the last two decades.

Some have thrived, helping poorly funded hospitals get the capital they needto buy better medical equipment, attract doctors and improve medical care for patients.

Others haven't fared as well. A few committed Medicare fraud and were fined by the federal government. Some are growing, but only through acquisitions. They can't seem to grow organically or to improve operations beyond what the hospital's prior owners have already fixed.

Time will tell which category Select Medical Corp. falls into. The operator of hospital and rehab clinics had its initial public offering in April. Despitethe sluggish stock market, the offering succeeded. It was managed by some of Wall Street's biggest names: Merrill Lynch, Credit Suisse First Boston, J.P. Morgan.

"The market was behaving very poorly, to say the least, which made it difficult for any company going public (at that time)," said Kemp Dolliver, analyst with SG Cowen, which also co-managed the offering. "Keep in mind that Iasis Healthcare Corp. had just pulled its IPO a few weeks before. Yes, I thinkSelect is a better company (than Iasis), but the issue is that you never know when you're in the midst of a transaction how a similar transaction that went on ahead of it will affect the next one."

Franklin, Tenn.-based Iasis isn't as strong a financial performer as Select.A week after it said it would pursue an IPO, Iasis announced it lost $4.8 million during the fourth quarter of 2000. Its physician practice operations are losing money. And it's in a legal dispute with a hospital owned by HCA -- The Healthcare Co., the country's biggest hospital chain.