Green Spring Health Services of Columbia announced yesterday it is buying Mainstay Inc., a Pennsylvania company that, like Green Spring, manages mental health services.
Mainstay, based in Camp Hill, Pa., will add 600,000 members and $15 million in annual revenue to Green Spring's 15 million members and projected revenue this year of about $350 million. Terms of the sale to Green Spring were not disclosed.
"We are entering an acquisition mode," said Dr. Henry T. Harbin, president and chief executive officer of Green Spring. "It has been a smaller part of our growth strategy, but it will become a bigger part."
He said Green Spring was expecting "another level of consolidation" in the business, in which Green Spring and three other large companies already control 70 percent of the national market.
Smaller companies, he said, are more interested in selling now than they were a few years ago because of continuing pricing pressures, administrative demands from new accreditation procedures, and a consolidation of the HMOs and insurers who are their customers.
Also, he said, Green Spring has more access to capital since late 1995, when Magellan Health Services of Atlanta became its majority owner. Harbin said Green Spring would operate Mainstay largely as an independent company, but future acquisitions could add to employment at Columbia headquarters. Green Spring currently has about 440 headquarters employees and another 160 workers in Columbia handling Maryland operations.
Pub Date: 4/17/97