Two major credit-rating services last week said they would review the debt ratings of Cape Coral (Fla.) Medical Center. Standard & Poor Corp. placed the hospital on CreditWatch with "developing" implications, meaning that the ratings could be raised or lowered. Cape Coral's BBB rating on $89 million of revenue bonds could be affected by a significant decline in profitability. But if an acquisition by its competitor, Lee Memorial Hospital in Fort Myers, Fla., is completed, the rating could be raised. The acquisition is being contested by the Federal Trade Commission (May 16, p. 10, May 9, p. 16). Meanwhile, Moody's Investors Service said it will review the credit position of Cape Coral during the first week of July. Cape Coral's debt has a Baa rating from Moody's.
Attorneys for Morton Plant Health System in Clearwater, Fla., and Mease Health Care in Dunedin, Fla., are preparing for an anticipated June 20 antitrust trial that will determine whether their proposed merger will go forward. The Justice Department and the state of Florida sued the hospital systems on May 5, contending that their merger would give them illegal control of nearly 60% of their inpatient market. A federal judge in Tampa issued a temporary restraining order blocking the deal until the trial is held on the government's motion for a preliminary injunction.
The president of National Medical Enterprises' Management Services Division and a group of investors are attempting to buy the division from NME. NME executives last week confirmed that Howard B. Finkel, president of the management services division, is heading a group that is bidding for the business. However, other bidders are being considered and a decision has not been made, said NME spokeswoman Christi Sulzbach. NME's management services division had contracts with 57 hospitals last year. The division has been targeted for divestiture by NME.
Florida Gov. Lawton Chiles has called a special seven-day legislative session beginning June 7 to consider a bill that would offer government-subsidized medical insurance to 1 million low-income residents. The bill was the subject of partisan squabbling when the Legislature was in its regular session in April, and there is no evidence the ideological bickering has ended. Mr. Chiles wants to offer insurance to people earning as much as 250% of the federal poverty level, while Republicans want to limit access to those earning up to 150%.
Joseph DeSilva abruptly resigned last week as president and chief executive officer of Phoenix, Ariz.-based Mercy Healthcare Arizona, executives said. Mercy executives did not explain the decision. Mr. DeSilva's resignation is effective June 30. He could not be reached for comment. He will be temporarily replaced by Executive Vice President and Chief Operating Officer Thomas Zenty.
Henry E. Manning, former president of Cleveland's MetroHealth System, has taken a top spot at a New York-based consulting firm. He will be president and chief executive officer of Sterling Health Capital Management. Mr. Manning was president and CEO of MetroHealth from 1970 until his ouster last year after a dispute with board members over control of the organization (March 15, 1993, p. 10). Questions also were raised about his receipt of $70,000 in annual pension benefits while he also received a salary for his job at the system.
The president and chief executive officer of Sisters of Providence Health System, Springfield, Mass., has announced his resignation effective July 1. Richard A. Hayden, 54, who became CEO in 1989, said he would return to healthcare consulting. He led a consolidation of acute care in the Springfield area and efforts to position the system as a vertically integrated network. The health system's two hospitals, 276-bed Mercy Hospital in Springfield and 185-bed Providence Hospital in Holyoke, Mass., merged administrative operations under one CEO in November 1993, and in March the system cut 200 positions, most of them at Mercy. In February, an affiliation agreement was reached with 257-bed Holyoke (Mass.) Hospital. A successor to Mr. Hayden has not been named.
