One of Houston's largest independent hospitals apparently is for sale, but buyers may have to be willing to start the bidding in the $200 million range.
"OrNda (HealthCorp) wanted to get out from under us, so they asked at our last board meeting if we would find a buyer," explained Barry Shevchuk, chief executive officer of Houston Northwest Medical Center.
Nashville, Tenn.-based OrNda has maintained a 49% equity stake in the hospital since majority control was sold to an employee stock ownership plan in 1989. OrNda's preferred stock is worth about $82 million. Add to that about $105 million in debt on the hospital, and the purchase price could be near the $200 million mark. In 1989, the hospital was sold for $212.5 million.
Recently, the Securities and Exchange Commission forced OrNda to restate more than four years of earnings because the agency didn't like the way the company accounted for its ownership interest in Houston Northwest (March 14, p. 4).
Mr. Shevchuk said Columbia/HCA Healthcare Corp., American Medical International and Memorial Hospital System all have expressed interest in the 498-bed hospital. Houston Northwest would make a nice fit in their existing networks. AMI has two hospitals in Houston; Memorial has seven hospitals; Columbia/HCA has the city's largest network, with nine facilities.
In fiscal 1992, the hospital lost $25 million on net revenues of $130 million, but like other ESOP-owned entities, profits often are wiped out by ESOP debt repayments.
Board discord. Sarasota (Fla.) Memorial Hospital board member Debby Adams found out last week that she couldn't rescind her resignation and that she was off the elected eight-member board. And six of the eight fellow trustees said they really weren't sorry to see the former psychiatric nurse go. Ms. Adams, 39, a board member since 1991, resigned on March 18, saying she didn't trust some board members and feared for her safety. She also filed a report with Sarasota Police, contending she had received harassing telephone calls and threatening mail.
In an interview with MODERN HEALTHCARE, Ms. Adams couldn't identify the alleged harassers but said police were investigating her complaint. She said the harassing calls and letters were in response to positions she took as a board member that questioned prevailing majority views.
"I resigned because I have been psychologically harassed," she said. In an article in the local newspaper, she said, "There are a lot of liars in the (hospital administration) and on the board currently*.*.*.*people who are extremely nasty, and I choose not to have to deal with that anymore."
Ms. Adams said conflict arose because she "upset the good old boys" on the board by posing "intelligent questions."
Ms. Adams said she changed her mind about the resignation the day after she submitted it because of support she said she received from the community. Three days later, however, Bill Harrison, Sarasota Memorial's attorney, said Ms. Adams couldn't withdraw her resignation. That opinion was supported by the state attorney general's ruling that, as an elected official, Ms. Adams' resignation was irrevocable.
Hospital Administrator Michael Covert said he was surprised and saddened by Ms. Adams' charges, which he termed "far-fetched and unfounded." In a board meeting last week, Ms. Adams requested an opportunity to speak but was denied. The board is expected to name a replacement at its May 9 meeting.
Ms. Adams hasn't decided whether she'll file a legal challenge to get back on the board.
Via satellite. The Mayo Clinic has received a $3.15 million contract from the Office of National Drug Control Policy to design and test the next generation of navigation, information and communications systems for use in its medical helicopter service to reduce response time and as a high-tech tool in the war against drug trafficking.
"The needs of law enforcement and medical helicopters are very similar," said David W. Claypool, M.D., a member of Mayo's emergency services division and the principal investigator in the research project. "Both need to identify remote locations with pinpoint accuracy and quickly communicate complex information from the scene."
The systems that Mayo choppers will test combine satellite communications technology, advanced homing devices and computer-generated mapping, making adverse weather and poorly marked rural areas less of a problem for pilots. While one of the early patient-care benefits will be speedier response times to far-flung locales, what will be more valuable for healthcare and law enforcement applications alike in the long term will be the "tremendously enhanced communication that will be available" through the new systems, Dr. Claypool said. "The ability to communicate by radio is really limited. We now spend most of our time not on decisionmaking but just trying to understand what the situation is."
Mayo's partners in the three-year project will be local police agencies and Integrated Systems Research Corp., an Englewood Cliffs, N.J.-based company specializing in advanced systems for tracking air and ground vehicles.
In search of excellence. Nominations are being accepted for the annual Henry B. Betts Award, which honors the recipient's contributions toward improving the lives of people with disabilities.
The award, named for Henry B. Betts, M.D., medical director and chief executive officer of the Rehabilitation Institute of Chicago, includes an unrestricted cash prize of $50,000. Criteria for nominees, who can be from any discipline, are "the vision, scope and continuing influence demonstrated by the nominee that improves lives of people with physical disabilities."
Nominations must be postmarked by June 15. For more information, call 312-616-1006.
Nominees also are being sought for the Peter F. Drucker Award for Non-profit Innovation. The award is given to a not-for-profit organization in recognition of results produced by a program or project using innovative management. Central to the criteria is "change which creates a new dimension of performance." The award is not presented to an individual or for the general work of an organization.
Named for the management guru, the award includes a $25,000 prize. Nominations must be postmarked by July 1. For more information, call 212-399-1710.