Investment bankers are not sure how easy it would be to take Horizon Healthcare Services Inc. public if current market conditions continue.
Horizon Healthcare, Newark, N.J., which does business as Horizon Blue Cross Blue Shield of New Jersey, is applying for permission from regulators to convert to a for-profit stock company charter and give up its current status as a nonprofit health service corporation.
Horizon gave the investment bankers’ reports to the New Jersey Department of Banking and Insurance along with the conversion plan.
The New Jersey department has posted the supporting documents on the Web along with a copy of the conversion plan.
New Jersey law would require Horizon to compensate the state before converting nonprofit assets to for-profit use.
New Jersey government officials have welcomed the Horizon IPO application, arguing that the conversion could raise billions of dollars for state health programs.
But analysts from Morgan Stanley Inc., New York, observe that the managed care industry is facing pressures from many sides, with customers resisting price increases, hospital rates increasing, disease management programs mostly failing to cut prices, employers reluctant to continue to prune benefits to compensate for rising prices, and observers noting an increase in underinsured patients.