The 7th U.S. Circuit Court of Appeals in Chicago has upheld the National Labor Relations Board's decision in the closely watched Electromation case, ruling that an Indiana manufacturing plant's internal employee task force was a labor organization protected from management interference. Healthcare labor experts have watched the case because joint management-labor committees are commonly used in the industry to address internal issues, such as improving quality of care. They praised the NLRB's decision, saying it meant management could not use the task forces to dictate the resolution of work-place issues.
A federal appeals court has ruled that insurers that try to limit healthcare coverage of some illnesses, such as AIDS, could be sued under the Americans With Disabilities Act. The decision by the 1st U.S. Circuit Court of Appeals in Boston last week was seen as expanding the scope of the law's coverage. The Americans With Disabilities Act technically protects employees against discrimination by employers and public facilities, not by health plans. But the appeals court said the worker in the case it reviewed could try to prove that his employer's insurer was acting on behalf of the employer and therefore could be subject to the act's prohibitions.
Caremark International's net income for the third quarter ended Sept. 30 rose 21% to $25.7 million, or 34 cents per share, compared with $21.2 million, or 29 cents per share, during the year-ago period. Net revenues rose 38% to $630 million. For the nine months, Caremark's net income dropped 3% to $53.3 million, or 70 cents per share, compared with net income of $55.5 million, or 76 cents per share, in 1993. Revenues climbed 35% to $1.8 billion. Caremark also said its agreement with Sandoz Pharmaceutical Corp. to manage a national database for schizophrenia patients using Sandoz's Clozaril drug expired in September. Caremark, however, will remain Sandoz's largest distributor of Clozaril. Northbrook, Ill.-based Caremark is the nation's largest provider of alternate-site healthcare services.
Abbey Healthcare Group said last week that a shareholder class-action lawsuit was filed against the company and several officers-including Chairman Timothy Aitken and former President and Chief Executive Officer Victor Chaltiel-accusing them of engaging in securities fraud during the company's 1993 purchase of Total Pharmaceutical Care. Abbey shareholder Barbara Nowack filed the lawsuit in state court in Los Angeles, seeking unspecified damages. Abbey fired Mr. Chaltiel, who headed Total Pharmaceutical Care, in February. Mr. Chaltiel subsequently filed a $7 million arbitration complaint against Abbey. Abbey has filed counterclaims against Mr. Chaltiel, accusing him of misrepresentation and fraud. Both complaints are pending in state arbitration.
Two of the nation's largest accounting firms have announced efforts to better serve the nation's integrated healthcare delivery systems. Ernst & Young, in a joint venture with Norrell Corp., the Atlanta-based temporary and outsourcing firm, announced the creation of HealthTask, a company that will provide business and administrative outsourcing services to hospitals and healthcare systems. Also, Coopers & Lybrand said it had formed Integrated Health Care Consulting Services, a separate consulting practice dedicated to assisting the healthcare and pharmaceutical industries.
Holy Cross Hospital has decided not to join a Chicago-area Roman Catholic hospital network. The South Side hospital's decision to take a pass on the Catholic Health Alliance of Metropolitan Chicago comes shortly after Cardinal Joseph Bernardin strongly encouraged Catholic hospitals to join the budding alliance (Oct. 3, p. 28). A spokesman for the archdiocese said that the cardinal is aware of Holy Cross' position and that further discussions with the 401-bed hospital are scheduled for November. So far, fewer than 12 of the 20 local Catholic facilities have agreed to join. Holy Cross executives said their decision was based on "an affirmative commitment to devote 100% of Holy Cross Hospital resources to carrying out its healthcare mission in the communities it serves."-Crain's News Service