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.

Analysts from Goldman Sachs Group Inc., New York, warned in a presentation made to Horizon executives in May that managed care company stock prices had performed worse than the S&P 500 index over the previous 2 years.

In addition to the state of the economy and of the managed care market, “election year/political concerns remain an overhang on the sector,” the Goldman Sachs analysts wrote in a comment on reasons for the sluggish managed care stock performance.

Some health care companies have been raising money through public offerings, but the average number of initial public offerings taking place each month has fallen more than 70%, and many companies have withdrawn IPO registrations, the Goldman Sachs analysts reported.

Horizon executives contend in their own conversion plan that the company needs to go public to get capital from Wall Street.

Simply converting to the new ICD-10 disease coding standard, from the current ICD-9 standard, will cost about $10 million, Horizon executives write.

Although Horizon has what appear to be large reserves today, the reserves are enough to cover member claims for just 93 days, the executives write.