Louisville, Ky.-based Vencor, a chain of 33 intensive-care hospitals, has agreed to manage 63-bed Lawndale Community Hospital in Philadelphia. Terms of the agreement weren't disclosed. The hospital is owned by Allegheny Health, Education and Research Corp., Philadelphia, but was closed more than a year ago. Vencor will convert the hospital to treat long-term, intensive-care patients. Vencor plans to eventually purchase the facility, which is its first in the Philadelphia area.
California Gov. Pete Wilson vetoed a bill approved by the state Legislature that would have required HMOs to disclose to consumers in their marketing materials the percentage of the premium dollar the plans spend on profits, administrative costs and direct medical services (Sept. 19, p. 22). But he signed another bill that, among other things, standardizes the process that HMOs use to authorize or deny medical services and requires HMOs to pay for emergency-room care by non-HMO physicians. The California Medical Association backed the bills, which were opposed by the HMO industry. Mr. Wilson also endorsed Proposition 187, an initiative that will appear on the November ballot and would deny all but federally required emergency care to illegal immigrants.
Georgia has requested a waiver from HCFA to allow Medicaid recipients in the five-county Atlanta area to voluntarily enroll in managed-care plans. Gov. Zell Miller, who proposed the pilot program, said it could save the state $3 million in annual costs and improve the health of enrollees. Georgia officials estimate that about one-third of the 200,000 Medicaid-eligible residents in the Atlanta area would join an HMO over the next three years. Georgia has 1.1 million recipients enrolled in its $42.7 billion Medicaid program. If approved by HCFA, Georgia would join at least seven other states that have decided to save money by using HMOs to manage the care of their Medicaid populations.
HBO & Co., an Atlanta-based healthcare information systems vendor, has completed its acquisition of Serving Software, a Minneapolis-based developer of healthcare resource management software. On the Sept. 13 closing date, publicly traded HBO & Co. issued about 1.5 million shares for the 5 million shares of Serving Software outstanding. Based on a 10-day trading average of $32 a share for HBO & Co. stock, the shares were valued at $9.33 a share, making the value of the transaction $46.6 million. Serving Software's president and chief executive officer, John E. Haugo, will serve as vice president and general manager of HBO & Co.'s Serving Software Group. The acquisition plan was announced in mid-May (May 23, p. 18).
Reynold Jennings, chief operating officer at Ramsay Health Care, will assume the additional role of president, the company said last week. Gregory Browne, the psychiatric hospital chain's current president and chief executive officer, will remain CEO. Mr. Jennings joined New Orleans-based Ramsay in November 1993. He was senior vice president in the Dallas region of National Medical Enterprises.
Sally Berger, formerly the national director of healthcare practice development at Ernst & Young, is establishing her own firm, Sally Berger & Associates. The Chicago-based company will provide business development, marketing and communications services for healthcare companies.
Fitch Investors Service, New York, has removed Arlington, Mass.-based Symmes Hospital's CC rating from FitchAlert. The action reflects Symmes' successful completion of the purchase and retirement of outstanding bonds. In July, Fitch lowered the bond rating on $19.9 million of debt to CC from B, reflecting concerns about Symmes' ability to obtain bondholder approval for its tender offer (July 25, p. 8). Failure to do so would have interfered with a proposed purchase of Symmes by the Lahey Clinic, a Burlington, Mass.-based group practice, and AdvantageHealth, a Woburn, Mass.-based rehabilitation network.