Three California healthcare systems last week entered an agreement in principle to establish an exclusive provider network that will seek state and regional managed-care contracts. San Francisco-based Catholic Healthcare West, Mercy Healthcare San Diego and La Jolla, Calif.-based Scripps Health publicly confirmed plans reported last month to create an alliance formed through a "pooling of assets" by Mercy and Scripps (March 28, p. 15). Under the agreement, 520-bed Mercy, which is part of the CHW system, will join the Scripps system. CHW and Scripps will have representation on each other's boards. A CHW spokeswoman said the proposed alliance isn't expected to thwart other possible alliances under study with healthcare systems such as Orange, Calif.-based St. Joseph Health System.
Cape Coral (Fla.) Hospital agreed last week to accept Lee Memorial Hospital's acquisition offer after all. Last month, 201-bed Cape Coral and 602-bed Lee Memorial, both located in the Fort Myers area, got sidetracked by last-minute acquisition offers from two for-profit companies, Columbia/HCA Healthcare Corp., Louisville, Ky., and Health Management Associates, Naples, Fla. (March 28, p. 4). To adequately weigh all offers, Cape Coral's board requested that Lee Memorial release it from its exclusivity agreement, a request that the public hospital denied. Under the non-cash agreement, Lee Memorial will assume Cape Coral's $130 million debt and assets, valued at $175 million.
HealthTrust-The Hospital Co. and Holy Cross Health System Corp. have signed an extension to their purchase agreement that gives the two systems additional time to decide whether to fight a Federal Trade Commission antitrust challenge of the proposed sale of Holy Cross' three Utah hospitals to HealthTrust (March 28, p. 3). At deadline, the agency had yet to take formal action against the systems, suggesting that the systems and the FTC may be discussing a possible settlement. The initial six-month purchase agreement expired on March 31; the length of the extension wasn't disclosed.
Executives of the Sisters of Charity of the Incarnate Word Health Care System, Houston, are talking with executives of Ochsner Medical Institutions, New Orleans, about joining Ochsner's managed-care network in Louisiana. Sisters of Charity has hospitals in Shreveport, Lake Charles and Alexandria that would allow Ochsner's HMO to expand into those cities. Ochsner Health Plan, the state's largest HMO, with 80,000 enrollees, now operates in New Orleans, Baton Rouge and Houma. In a related matter, Oschner and Tulane University said they had agreed to end discussions exploring a possible merger. The two institutions said they had been talking since January about closer relationships in healthcare delivery and medical education and research.
In a move to join the prepaid healthcare market, Mechanicsburg, Pa.-based Continental Medical Systems has acquired Medical Management Associates, Los Angeles, a privately owned managed-care company operating a contract management firm and 15 independent practice associations with 4,000 physicians and 110,000 managed-care enrollees. CMS, which operates 38 rehabilitation hospitals and provides inpatient and outpatient rehab services nationally, said the acquisition is part of the company's yearlong effort to expand its delivery network. The two principal shareholders of MMA, H. Ted Levenson and M. Patricia Duggan, will retain their jobs as chief executive officer and chief operating officer, respectively.
Abbott Laboratories last week announced the opening of a new marketing service that will combine its four major business lines-pharmaceuticals, nutritional products, diagnostics and hospital products-into one unit. Executives said the new system, named the Abbott HealthSystems Division, will make it easier for integrated health systems to do business with the North Chicago, Ill.-based firm. The Abbott HealthSystems Division replaces the Abbott Corporate Hospital Marketing Division. Earlier this year, Baxter International began selling its products and services to hospitals through a consolidated sales staff instead of through salespeople representing individual product lines and divisions (Feb. 28, p. 45).
Two of Chicago's largest orthopedic physicians' groups have merged in an effort to strengthen their contractual ties with Chicago-area health plans and third-party payers. University Orthopaedics and Midwest Orthopaedics have merged under Midwest's name and have broadened their hospital affiliations to nine acute-care facilities. There are 21 physicians in the group. Neither medical group would release financial information on the deal.