Allina Health System in Minnesota last week announced it will purchase an 80% controlling interest in StrategiCare, a Minneapolis firm that provides medical practice management systems and related administrative purchases. Terms of the agreement weren't disclosed. The move comes a week after Allina was formed through the completed $2 billion merger of Medica and HealthSpan Health Systems Corp. (Aug. 8, p. 56). StrategiCare is the parent company of DISC Computer Systems and Marudas Business Forms Co. The subsidiaries will allow networking with more than 3,000 ambulatory healthcare providers and will enable physicians to exchange patient and billing information electronically.
Kaiser Foundation Health Plans is creating an insurance company, Kaiser Permanente Insurance Co., to underwrite its new point-of-service plans, which are now underwritten by two other insurers. The move will give Kaiser flexibility and allow it to be more responsive to market needs, said Michael Dudley, a Kaiser vice president. The new point-of-service plans have nearly 10,000 enrollees in several states.
Cypress, Calif.-based PacifiCare Health Systems' profits for the third quarter ended June 30 rose 36% to $26.8 million, or 95 cents per share, from $19.7 million, or 71 cents per share, a year ago. Operating revenue increased 31% to $752.3 million. Results were boosted by membership gains, particularly in PCHS' Medicare program, and efficiencies in the use and cost of services. PCHS provides managed-care products serving more than 1.2 million people.
Insurers paid about $1.5 billion in claims last year as a direct result of the AIDS epidemic, according to an annual survey by two Washington-based insurance organizations, the American Council of Life Insurance and the Health Insurance Association of America. That amount is a 7% increase from the $1.4 billion in claims in 1992. Some 372 companies responded to the 1993 survey.
A Los Angeles Superior Court jury ordered Medical Center of North Hollywood, a 165-bed hospital owned by American Medical International, to pay $1.8 million in punitive damages and $112,000 in compensatory damages to five AIDS patients whose physician treated them with the drug Viroxan, which is not approved by the FDA for any medical use. Alan Rushfeldt, the hospital's attorney, said he will ask for a new trial. The patients were in the hospital for only four hours for catheter implantation and were not given Viroxan in the hospital, he said.
Medical-supply distributor General Medical Corp. last week completed its previously announced acquisition (June 13, p. 48) of F.D. Titus and Sons. Terms of the acquisition weren't disclosed. Titus, based in City of Industry, Calif., has annual revenues of about $150 million, drawn mostly from sales to physician offices and other alternate sites. General Medical also recently announced plans to buy the distribution business of Waltham, Mass.-based Foster Medical Supply. Foster's revenues and the acquisition terms weren't disclosed. The company works with hospitals, nursing homes and physician offices in the Northeast, Ohio, Michigan and Florida. Richmond, Va.-based General Medical, with annual revenues of about $1 billion, is the nation's third-largest distributor to hospitals and the largest to alternate sites.
Wellcare Management Group, a Kingston, N.Y.-based managed-care company, reported a 96% increase in earnings for the second quarter ended June 30 to $1.5 million, or 24 cents per share, from net income of $748,000, or 18 cents per share, in the year-ago quarter. Revenues rose 91% to $29.7 million. For the six months, net income grew 8% to $2.7 million, or 44 cents per share, from $2.5 million, or 34 cents per share, in the year-ago period. Revenues soared 103% to $58.1 million. Wellcare's HMO serves more than 78,000 enrollees and 1,810 employer groups in southeastern New York.