The University of Michigan Medical Center in Ann Arbor and Far-mington Hills, Mich.-based Mercy Health Services are in "high-level discussions" to examine a possible collaboration, according to a statement released by Mercy. A spokesman for the university medical center said the two sides have been talking informally since late last year and are close to signing an agreement to enter negotiations. Mercy owns, operates or affiliates with 39 hospitals in seven states, including 602-bed Catherine Mc-Auley Health System in Ann Arbor, which includes St. Joseph Mercy Hospital. The 856-bed University of Michigan Medical Center is composed of a top-ranking medical school, more than 100 outpatient clinics, two dozen research centers and institutes, and seven hospitals: University Hospital, C.S. Mott Children's Hospital, Women's Hospital, Holden Perinatal Hospital, W.K. Kellogg Eye Center, Child and Adolescent Psychiatric Hospital, and Adult Psychiatric Hospital.
The No. 2 executive at Johns Hopkins Hospital in Baltimore plans to leave his post this week over policy differences. Gennaro J. Vasile, M.D., executive vice president and chief operating officer at the hospital, resigned and was scheduled to leave his job late last week, according to an announcement by James Block, M.D., chief executive officer of the hospital and the Johns Hopkins Health System. The announcement said "differences with respect to system integration were cited as the primary reason" for the resignation.-Associated Press
A psychiatric counselor who admitted taking kickbacks from a Fort Worth, Texas, psychiatric hospital was sentenced last week to eight years in federal prison and fined $375,000. Bert Wayne Bolan, 53, admitted receiving kickbacks from Psychiatric Institute of Fort Worth, which had been one of the most profitable hospitals operated by National Medical Enterprises. Bolan's sentence is the stiffest so far in association with the fraud investigation of NME. During a U.S. District Court hearing in Fort Worth, officials said Bolan received as much as $36,000 a month for referring patients to the hospital. NME has divested its psychiatric hospitals and changed its name to Tenet Healthcare Corp. Psychiatric Institute of Fort Worth, which closed in 1993, was purchased by Vencor as a long-term intensive-care hospital. Last year, NME paid a record $379 million fine to settle charges of fraud at its psychiatric hospitals.
Beverly Enterprises' net income for the first quarter ended March 31 rose 9% to $16.5 million, or 17 cents per share, from $15 million, or 15 cents per share, in the year-ago period. Revenues climbed 11% to $799 million. The Fort Smith, Ark.-based company attributed the increased earnings to growth in its higher-margin pharmacy and rehabilitation services, which helped boost Beverly's operating revenues by 12% during the quarter. Same-store revenues rose 9% during the first quarter. Beverly is the nation's largest nursing home chain, operating 725 facilities.
The New Jersey Hospital Association will seek an injunction this week to block $135 million in state Medicaid cuts to hospital payments. U.S. District Judge Garrett E. Brown Jr. is scheduled to hear arguments in Trenton on April 25 and 26. The NJHA's suit, filed last month, maintains the cuts violate the federal Boren amendment, which guarantees "reasonable and adequate" Medicaid payments to healthcare providers (March 20, p. 22).
Vencor reported a 54% rise in profits to $9.1 million, or 31 cents per share, for the first quarter ended March 31, compared with $5.9 million, or 23 cents per share, in the year-ago period. Revenues grew 38% to $120.4 million. Louisville, Ky.-based Vencor operates 34 intensive-care hospitals in 16 states.