The Louisiana Legislature last week approved a change in the state's abortion law, a move that ensures continued Medicaid funding to the state. Gov. Edwin Edwards signed the bill. Some $3 billion in Medicaid funding had been threatened when a federal judge this month ruled the state was illegally restricting federally funded abortions for poor women who are victims of rape or incest (Aug. 22, p. 13). Louisiana, which had the nation's strictest abortion law, only allowed government funding of abortions when the mother's life was in jeopardy.
OrNda HealthCorp, the nation's fifth-largest investor-owned hospital chain, completed its planned public offering of $125 million in subordinated bonds to repay existing debt and finance acquisitions. The Nashville, Tenn.-based chain of 46 hospitals said the notes are priced at 11.375% and are due in 2004. OrNda will use the proceeds to reduce debt under its revolving credit agreement, repurchase 10.25% notes that had been issued by American Healthcare Management, with which it merged, and finance acquisitions.
Hallmark Healthcare Corp., a 17-hospital chain based in Atlanta, reported a 136% increase in net income for the year ended June 30. The company, which is being acquired by Houston-based Community Health Systems, reported net income of $24.5 million, or $6.65 per share, for the year, compared with net income of $10.4 million, or $3.01 per share, in the previous fiscal year. Revenues rose 7% to $191.5 million. For the fourth quarter, Hallmark reported an 84% drop in profits to $469,000, or 13 cents per share, compared with $3 million, or 86 cents per share, in the year-ago period. Revenues rose 1% to $47.5 million. The year-end profit figures included a $19.8 million gain from early repayment of debt and $3.6 million in additional interest expense from an $80 million bond issue in December.
Dennis O'Leary, M.D., president of the Joint Commission on Accreditation of Healthcare Organizations, has scheduled an Oct. 5 meeting with hospital executives in Ohio. The meeting was arranged by the Ohio Hospital Association. The meeting will be the latest in a series of personal visits Dr. O'Leary is paying to hospital executives who have expressed concerns about the JCAHO's accreditation services, public disclosure policies and clinical indicator monitoring system (See related stories, pages 40 and 44). State hospital associations in Arkansas, Louisiana, New York and Tennessee have convened similar meetings for their hospital members over the past several months (Aug. 8, p. 25).
Principal Health Care, the managed-care subsidiary of Des Moines, Iowa-based Principal Financial Group, has agreed to buy Coastal Bend Health Plan. The HMO is the largest in Corpus Christi, Texas, with 32,000 enrollees. Principal operates managed-care plans with about 1.5 million enrollees nationally. Coastal Bend will be its first operation in Texas. The plan will be renamed Principal Health Care of Texas.