MIAMI--(BUSINESS WIRE)--Physicians Healthcare Management Group, Inc. (Phyhealth) (Pink Sheets: PHYH - News), a developer of health maintenance organizations (HMOs) in partnership with physicians, today announced the signing of a $600,000 convertible debenture with The Nutmeg Group, LLC. The proceeds will be used for general working capital, including marketing initiatives to support the planned launch of the company's first HMO in the first half of 2008.

Mr. Robert Trinka, chairman and chief executive officer, commented, "We view this latest financing as a vote of confidence in our strategy to bring private industry solutions to the mounting healthcare challenges, not the least of which is putting physicians back in control of patient care. This $600,000 of working capital is in addition to our previously announced $4 million investment, with the latter being held in escrow in order to meet the state funding requirements for our HMO application. We are making progress on the formation of our first HMO and will provide additional updates as we move forward with our application."

Mr. Trinka continued, "We believe that escalating costs for healthcare in the U.S. are directly related to deficiencies in the structure of the healthcare delivery system. By introducing community-based HMOs that are owned and operated in partnership with participating physicians, physicians can assume end-to-end management of healthcare for their patients. This enables physicians to deliver the highest quality care at affordable costs, while aligning incentives with the payor. We also intend to layer on additional products and services that would provide physicians the opportunity to manage their own medical malpractice insurance programs, develop local care facilities and wellness programs, as well as implement cutting edge information technologies including secure electronic medical records."

Mr. Trinka concluded, "Getting our first HMO up and running is the foundation for our longer term strategic plan to bring physician-managed HMOs to communities around the country. This model is easily replicated and highly scaleable. Most Americans are in agreement that change is necessary to maintain the high standards of healthcare we have come to enjoy, and we believe that physician-managed healthcare on the community level provides the greatest benefits to all concerned."

About Physicians Healthcare Management Group, Inc.

Phyhealth is a developer of fully integrated healthcare organizations in partnership with physicians. Phyhealth Plans preserve the physician-patient relationship in order to deliver high-quality affordable healthcare within its selected communities. Phyhealth offers a turnkey, prepaid health plan solution to physicians for their Medicare and other individual patients who prefer to choose their own doctor and who make their own healthcare insurance purchasing decisions. Phyhealth Plans are unique in integrating all aspects of the delivery and financing of care, including providing medical liability insurance protection through Physhield Insurance Exchange, Phyhealth's exclusive risk retention group. The Phyhealth model empowers physicians to proactively manage their patient's general health and medical care and enhances physician financial rewards by increasing practice revenues, reducing expenses and restoring the economic value (equity) of their medical practices.

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Source: Physicians Healthcare Management Group, Inc.

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