The number of municipal healthcare bond issuers with debt rated BBB has grown 15% during the past decade, according to Standard & Poor's Corp. An analysis appearing in CreditWeek Municipal said the growth is because of increased investor acceptance of new BBB-rated bond issues, the ability of BBB-rated issues to trade more favorably than unrated paper and deteriorating credit quality in healthcare. BBB is a medium-grade rating indicating that the issuer is able to make principal and interest payments. As the healthcare environment changes, institutions with BBB ratings are likely to be under increased pressure to remain profitable, Standard & Poor's said.
Standard & Poor's Corp. affirmed the AA rating on the debt of Blue Cross and Blue Shield of Illinois and removed it from CreditWatch. The Blue Cross plan had been under review because of a proposed merger with Blue Cross and Blue Shield of Iowa. The merger has been called off (May 30, p. 12).
Prudential Securities has completed a private placement of $75 million in healthcare receivables. The New York-based investment banking firm has established itself as a major player in receivables "securitization." Prudential packages healthcare receivables as debt securities and sells the notes to raise capital for healthcare companies. The $75 million receivables pool was originated by National Premier Financial Services, a Columbus, Ohio-based healthcare receivables finance company. National Premier also will monitor collections and service the receivables. Rated AA by Standard and Poor's Corp., the notes have a maturity of June 1, 1998, and are backed by receivables from Geriatric and Medical Centers, Philadelphia; Premier Anesthesia, Atlanta; Rx Medical Services Corp., Fort Lauderdale, Fla.; Oncology Services Corp., State College, Pa.; and Thera-Kinetics, Mount Laurel, N.J.
The board of Health Management Associates, a Naples, Fla.-based chain of 20 hospitals in 11 states, last week approved a 3-for-2 stock split. Shares will be distributed on or about June 17 to shareholders of record on May 31. HMA stock is traded on the New York Stock Exchange.
HIP/Rutgers Health Plan, a Somerset, N.J.-based HMO, said it exceeded national quality-of-care goals for eight of nine vital healthcare services. It failed to meet the goal for cervical cancer screening. With 71% of female members between 18 and 64 having Pap tests within the past three years, HIP/Rutgers' performance fell 4 percentage points below the goal established by the Health Plan Employer Data and Information Set, a national quality-of-care reporting system. Victoria A. Wicks, president and CEO of the 175,000-enrollee plan, said HIP/Rutgers already has begun an educational campaign on the importance of Pap tests.
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 received a salary for his job at the system. Since then, the MetroHealth board voted to separate its 694-bed county hospital from a 413-bed private facility formerly in the system.
The University of California at Los Angeles fired James G. Campbell, former administrator of UCLA's Department of Radiological Sciences, after an investigation found he billed the university for work by temporary personnel that wasn't performed, and the work was billed at excessive rates. Mr. Campbell had been on paid leave since April as a result of a department restructuring. A UCLA internal investigation, in cooperation with the FBI, also found "information indicating that Campbell had close business ties" with the agencies, called registries, that provide temporary radiologists and other personnel at UCLA Medical Center and the West Los Angeles VA Medical Center.