• Technological and pharmaceutical improvements that increase the cost of providing, or reduce
Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. We advise you, however, to consult any additional disclosures of risks we make in our filings with the Securities and Exchange Commission, including, without limitation, the discussion of risks and other uncertainties under the caption “Risk Factors” contained in Item 1 of this report under the caption “Business-Risk Factors”. You are cautioned not to rely on such forward-looking statements when evaluating the information contained in this report. In light of the significant uncertainties inherent in the forward-looking statements in this report, you should not regard the inclusion of such information as a representation by us that objectives and plans anticipated by the forward-looking statements will occur or be achieved, or if any of them do occur or are achieved, the impact they will have on our results of operations and financial condition.
June 30, 2003, managed care, Medicare and Medicaid payers accounted for 55%, 30% and 9% of gross patient revenues, respectively. These payers receive significant discounts compared to other payers, and these payers continually seek to reduce payments to lower the cost of health care for their members. We are also at risk for highly acute cases for payers using a prospective payment system.
In February 2002, the Pennsylvania Insurance Commissioner placed PHICO Insurance Company into liquidation. PHICO provided our professional and general liability coverage during the period June 1, 1999 to May 31, 2000. We are aware of two claims for which PHICO is responsible under this policy. Our costs for these claims may be subject to partial reimbursement from certain state guaranty funds, PHICO’s estate or certain of its reinsurance companies. While we are unable to predict the outcome of these claims, management believes that our professional and general liability reserve is adequate to cover such claims should PHICO not be able to pay all or a portion of the claims.
We believe that the working capital on hand and the availability of revolving borrowings under our amended 2001 credit facility are sufficient to meet our operating and capital needs for the foreseeable future. Additionally, certain funds controlled by Morgan Stanley Capital Partners (the “MSCP Funds”) have entered into a subscription agreement with us to purchase an additional $273.4 million of our Common Stock to fund future acquisitions and cash flow needs. Common Stock purchases by the MSCP Funds are subject to several conditions outside our control, including the approval of the Investment Committee of Morgan Stanley Capital Partners. No assurance can be given that any or all of such conditions to additional Common Stock purchases will be met. We anticipate spending approximately $155.0 million on facilities expansions, renovation projects and medical upgrades during fiscal year 2004, including the remaining amounts owed for the construction of West Valley. Funding for these capital projects may require that we draw upon our revolving loan facility during the first or second quarter of fiscal 2004.
and future occurrences differ from historical claims trends. The estimation process is also complicated by the relatively short period of time in which we have owned our health care facilities as occurrence data under previous ownership may not necessarily reflect occurrence data under our ownership. While management monitors current claims closely and considers outcomes when estimating its reserve, the complexity of the claims and wide range of potential outcomes often hampers timely adjustments to the assumptions used in the estimates.