Summit Care Corp. has raised $28.6 million through a public offering of 1.7 million shares of common stock at $17.75 per share. As a result of the transaction, Summit Care now has a total of 6.7 million shares outstanding. In addition, Burbank, Calif.-based Summit Care completed a $25 million line of credit with three banks. The company said it intends to use the proceeds from the transactions to repay $10 million in debt and to fund $8 million in construction costs for the addition of 242 skilled-nursing beds in California and Arizona. The remaining proceeds will be used to finance new long-term-care centers, to convert standard nursing beds to subacute-care beds, to make improvements on existing nursing facilities and for general corporate purposes. Summit Care provides subacute-care, rehabilitation services and infusion therapy through 19 skilled-nursing facilities and four assisted-living centers in Arizona, California and Texas.
Serving Software and HBO & Co. have executed a definitive agreement to merge, subject to regulatory approval and shareholder approval. HBO & Co. will pay $40 million to $46.5 million for Serving Software, depending on a share exchange ratio to be determined. The companies announced their intent to merge on May 13 (May 23, p. 18).
AmeriNet has awarded a multimillion-dollar contract to Abbott Laboratories, Abbott Park, Ill. The agreement covers Abbott's line of multisource and proprietary injectable drugs. It's an expansion of an existing agreement between the two companies. Further details weren't disclosed. AmeriNet, a St. Louis-based purchasing network, represents more than 2,800 healthcare facilities nationwide.
PacifiCare of Florida has agreed to acquire Pasteur Health Plan, an HMO based in Hialeah, Fla. Pasteur has 50,000 enrollees and was founded 27 years ago by Ismael Hernandez, M.D., a Cuban-born physician who now is chairman emeritus. Financial terms weren't disclosed. PacifiCare of Florida, an HMO with 20,000 members in southern Florida, is part of PacifiCare Health Systems, Cypress, Calif., a publicly traded HMO operator with 1.2 million members in six states.
Irving, Texas-based VHA has agreed to promote United HealthCare's managed-care services to VHA's national provider network. Services available to VHA's 1,013 provider organizations include utilization review, case management and information technology services. VHA's network is composed primarily of hospitals, about 100 of which have formed integrated systems. "While we have historically focused on HMOs, we see enormous potential in providing services to provider organizations that, while not actually in the HMO or insurance business, are increasingly assuming risk," said John Blank, M.D., United HealthCare's vice president. The Minnetonka, Minn.-based company owns 20 HMOs nationwide.
Jake Henry Jr., 48, was named chief executive officer of AMI St. Francis Hospital in Memphis, Tenn. American Medical International, Dallas, bought St. Francis in May, and the company's senior vice president, O. Edwin French, had been serving as interim CEO of the 587-bed hospital. Mr. Henry formerly was executive vice president of Orange, Calif.-based St. Joseph Health System.
Michael Lake has joined Oceania, a 5-year-old healthcare software developer based in Palo Alto, Calif., as its vice president for marketing and sales. Mr. Lake was president of Bell Atlantic Healthcare Systems until April, when he resigned following the Greenbrae, Calif.-based unit's purchase by Boston-based Information Partners (April 25, p. 10).
Education and counseling programs are critical to the treatment of heart-failure patients, the Agency for Health Care Policy and Research said. It released new guidelines for the treatment of left-ventricular systolic dysfunction, the most common type of reduced heart function. Patients' widespread failure to follow medical instructions is a major reason why many are readmitted to hospitals, the agency said. Its guidelines also urge physicians to use drugs known as ACE inhibitors to treat all patients suffering from left-ventricular systolic dysfunction. Treating heart failure cost more than $10 billion in 1990. About $7 billion was for hospital care.