VHA shareholders recommended last week that the alliance develop a "committed buying" program to award lower prices to hospitals that buy a large share of supplies under VHA contracts (See related story, p. 6). Two other hospital groups, Premier Health Alliance and SunHealth Alliance, recently announced similar purchasing programs (Jan. 23, p. 8). VHA, the nation's largest alliance of not-for-profit hospitals, will develop a proposal later this spring.
Sherman Oaks, Calif.-based Triad Healthcare emerged from bankruptcy last week governed by a new board of directors. Not-for-profit Triad, which owns and operates Sherman Oaks Hospital and Health Center, a 156-bed acute-care facility, filed for Chapter 11 bankruptcy protection on Feb. 1, 1994. Triad's prior board and management resigned a year ago. The company said it has more than $2 million in cash for operations on its balance sheet. In reorganization, it slashed costs, added more than 30 new managed-care contracts and closed 139-bed West Valley Hospital in Canoga Park, Calif. Under its reorganization plan, Triad's unsecured creditors will receive about 30 cents for every $1 owed for valid claims.
Ramsay Health Care completed a sale-leaseback arrangement for two of its inpatient psychiatric facilities with a real estate investment trust for $12 million. The New Orleans-based company leased Desert Vista Hospital, Mesa, Ariz., and Mission Vista Hospital, San Antonio, from Birmingham, Ala.-based Capstone Capital Corp. for 15 years and will continue to operate the hospitals. The sale will result in a book loss of about $2.8 million. Approximately $7.8 million of the proceeds will be used to repay debt.
A U.S. District Court jury in Albuquerque, N.M., has awarded about $600,000 to a Ruidoso, N.M., physician who alleged that Presbyterian Health Care Services conspired with her competitors to force her out of business. The jury found that the hospital board in April 1993 wrongfully terminated Arlene Brown's privilege to deliver babies at Presbyterian-owned Lincoln County Medical Center in Ruidoso because of an alleged failure to consult with specialists on difficult cases. Brown contended that decision and other efforts to hurt her practice unfairly benefited other physicians and constituted an antitrust violation. Presbyterian and two co-defendants plan to appeal the verdict to the 10th U.S. Circuit Court of Appeals in Denver, defense lawyers said.-Associated Press
Coastal Healthcare Group, Durham, N.C., has agreed to acquire Mid-South Insurance Co., Fayetteville, N.C., in a move Coastal said will strengthen its presence in key Sunbelt markets. The stock-for-stock transaction is valued at $80 million. Mid-South, primarily an indemnity insurer, has 2,200 employer relationships covering 81,000 people. It focuses on small-group employer markets in the Carolinas, Georgia and Virginia but is licensed in 28 states, including Coastal's target markets of Florida and Texas. It has contracts with 4,400 physicians and 180 hospitals. Mid-South's revenues for the year ended Dec. 31, 1994, were $79 million. Steven M. Scott, M.D., Coastal's president and chief executive officer, said the deal will offer Coastal competitive advantages to its HMO operations in North Carolina and will enable Coastal to add a point-of-service option to its northern Florida HMO, HealthPlan Southeast.
Abbott Laboratories reported that net earnings rose 13.9% to $417.3 million, or 52 cents per share, in the first quarter ended March 31, from $366.2 million, or 45 cents per share, in the year-ago period. Total sales for the first quarter rose 14% to $2.5 billion. Domestic sales grew 10.3% to $1.4 billion, while international sales increased 20.3% to $970 million.
HHS' Agency for Health Care Policy and Research has launched a $2.5 million study to assess the current and future effects of managed care and other market forces on healthcare costs, quality and access. Clifton R. Gaus, the agency's administrator, said the study "will provide a clear and comprehensive picture of where the market is headed and which innovations are most likely to contain costs while improving quality."