Moody's Investors Service, in a review of Iowa hospital bond ratings, upgraded one rating and confirmed five worth a total of $150 million. The ratings partly reflect Iowa's unregulated reimbursement environment and limited competition or the leading market positions of the facilities reviewed, Moody's said. The review is part of the New York-based credit-rating agency's state-by-state analysis of unenhanced healthcare bond ratings. The upgrade to A1 from A on Burlington (Iowa) Medical Center's $20.4 million in outstanding debt reflects its "overwhelming level of cash reserves relative to its debt." The hospital and its foundation have a total of $89.6 million in cash and reserves. Moody's confirmed the ratings of Des Moines General Hospital (Ba) and Iowa Health System (A1) in Des Moines; Keokuk (Iowa) Area Hospital (Baa); and Mercy Hospital (A) and University of Iowa Hospitals and Clinics (Aa) in Iowa City.
American Health Properties, a Denver-based real estate investment trust, has prepaid $14.6 million in mortgages on two hospitals it acquired in 1987, eliminating all the secured debt on its $615 million portfolio of properties. The prepayments will have a positive impact on net income and cash flow this year, said Victor C. Streufert, executive vice president and chief operating officer. The REIT also has received $16.8 million from Menorah Medical Park in Overland Park, Kan., which intends to pay off a construction loan from AHP. Menorah Medical Park and its parent recently were acquired by HealthMidwest, a Kansas City, Mo.-area healthcare system.
Humana has bought a minority interest in CMG Health, a Owings Mills, Md.-based behavioral management services firm. Humana, a Louisville, Ky.-based managed-care company, declined to disclosed the financial terms. CMG will manage mental health and substance-abuse care for Humana's health plans in selected markets. CMG now manages care for 1.3 million enrollees in its behavioral healthcare programs.
New Enterprise Associates, a $13 billion venture capital firm with headquarters in San Francisco and Baltimore, has funded a new $230 million limited partnership that will invest in healthcare, information technology and the conjunction of those two fields. "We see enormous opportunities in applying information technology to improve healthcare," said Charles W. Newhall III, head of the firm's medical and life sciences practice. He also anticipates his firm funding other areas in healthcare, including genetic therapy, minimally invasive medical procedures and alternative healthcare. With the new fund, New Enterprise Associates manages more than $750 million in capital for investment in start-up and established companies.
Pharmacy Management Services has signed a contract to provide CNA Insurance Cos. with its cost-containment programs in workers' compensation and utilization management. CNA will use Tampa, Fla.-based Pharmacy Management's MedView Services preferred provider organization to direct those it insures to low-cost providers. The contract covers Connecticut, Florida, Massachusetts, Michigan, North Carolina and South Carolina. MedView has contracts with 1,650 hospitals and 60,000 outpatient providers.