Congressional Republicans' Medicare reform bill will put any money saved from program changes back into Medicare, not toward reducing the federal deficit, said House Speaker Newt Gingrich (R-Ga.). He told a meeting of senior citizens advocates in Washington late last week that a bill to ensure the solvency of the Medicare Hospital Insurance Trust Fund will be kept separate from other budget measures. He said that will keep Medicare from becoming "entangled" in the debate on balancing the federal budget by 2002. "We don't want to make any decision on Medicare based on anything other than ensuring fiscal stability of Medicare," Gingrich said.
After assurances were given that competitors wouldn't be barred from contracting with the only children's hospital in Jacksonville, Fla., two not-for-profit healthcare systems received state antitrust approval to merge. The new Baptist/St. Vincent's Health System will control six hospitals with a 37% market share. It includes 180-bed Wolfson Children's Hospital. In a settlement with Florida's attorney general, Baptist/St. Vincent agreed to allow competing hospitals and managed-care payers to contract with Wolfson, a $48 million facility Baptist Health System opened two years ago. William Mason, Baptist's president and chief executive officer, said the system had assured the community in its fund-raising drive several years ago that Wolfson would remain open to all. Baptist and St. Vincent's Health System will control the new system equally. St. Vincent's is part of the Daughters of Charity National Health System, the nation's largest not-for-profit Catholic system with 48 hospitals. Sister Irene Kraus, former president of the Daughters of Charity system, will be chairwoman of Baptist/St. Vincent's board.
Citing falling hospital occupancy rates, Kaiser Permanente officials said they will eliminate inpatient services at 216-bed Bess Kaiser Medical Center in Portland, Ore., in January 1997. Early next year, Kaiser enrollees will begin receiving hospital care at Portland's Providence St. Vincent Medical Center, which is part of the Sisters of Providence Health System. Kaiser physicians will treat enrollees at Providence and at a joint pediatric center at Oregon Health Sciences University's Doernbecherin Portland. Alternative uses are being explored for 36-year-old Bess Kaiser hospital.
Coastal Healthcare Group blamed the actions of a major South Florida customer, Humana, for lower-than-expected earnings that prompted its stock to plunge 28% last week. Coastal, a physician management company, reported a 5% increase in net income to $6.6 million, or 27 cents per share, for the first quarter ended March 31. That compares with earnings of $6.3 million, or 29 cents per share, in the year-ago period. Total revenues rose 18% to $207.9 million. On average, analysts projected earnings would be 35 cents per share. Chief Executive Officer Steven M. Scott, M.D., said the company's pre-tax earnings increased 30% elsewhere, but in South Florida actions by Humana hurt earnings. Those actions included the continued disenrollment of Medicare members from Coastal clinics, the addition of new benefits for which the costs were passed on to Coastal providers and Coastal's "inability to freely market our physician network," Scott said. The actions have eliminated any prospects of significant earnings from revenues associated with the HMO, he said. The drag on earnings is likely to continue throughout this year, but the company is reviewing its options, including renegotiating its contract with the HMO, Scott said. After the report, Coastal stock sank $6 to close at $15.38 per share in New York Stock Exchange trading on April 27.
The state of Nebraska decided that Columbia/HCA Healthcare Corp. may purchase Bishop Clarkson Memorial Hospital in Omaha for $84 million, but approval by the University of Nebraska Medical Center is pending. The university hospital contends that it has first option to buy the neighboring hospital, part of a 1953 agreement in which the university helped secure the property on which Clarkson is built. The university hospital has about a month to decide if it will buy the facility. Clarkson and Columbia officials have questioned whether the university's option is still valid.