Baxter International last week declined to comment on a published report that it is in discussions with W.R. Grace to purchase Grace's National Medical Care kidney-dialysis unit. Officials at Waltham, Mass.-based NMC referred questions on The Wall Street Journal report to Grace officials. They said Grace has discussed various proposals for NMC with other parties and has not abandoned a plan to spin off the NMC unit. A spokesman declined to say whether Baxter is one of the companies Grace has talked with. After the announcement of a federal investigation of the unit in October, Boca Raton, Fla.-based Grace delayed its plans to spin off NMC to stockholders until the first quarter of 1996. The tax-free transaction, which the company announced in June, was expected to close by year-end. That delay has led Grace to affirm it has not abandoned the spinoff, but is considering several options for the unit. NMC received five subpoenas from HHS. At that time, Grace said the investigation covers "a very broad range of issues relating to nearly all aspects of NMC's businesses."
Oklahoma's only state-owned hospital system, University Hospital Authority, last week agreed to enter a partnership with Columbia/HCA Healthcare Corp., the nation's largest healthcare system. The deal calls for Nashville, Tenn.-based Columbia to pay $50 million to become a 60% partner in a joint operating company that merges the university system with Columbia's Presbyterian Hospital in Oklahoma City. Of those funds, $24 million would go to the authority and $26 million to the University of Oklahoma's medical school. In addition, Columbia is expected to invest $25 million to $40 million in capital improvements at the children's hospital. The authority, a state agency, includes University Hospital and Children's Hospital. A third authority hospital, O'Donoghue Rehabilitation Institute, closed last spring, which resulted in the layoffs of about 700 workers. The system would be governed by a 10-member board, with half the members appointed by Columbia and half appointed by the authority. However, Columbia would manage all three hospitals. Profits would be divided 60% to Columbia and 40% to the authority, officials said.
Humana and Johns Hopkins Health System are teaming up to form physician networks throughout Maryland. "This strategic affiliation is the first of its kind for Johns Hopkins," said James A. Block, M.D., Johns Hopkins Health System president and chief executive officer. He said Johns Hopkins will benefit from Humana's nationwide experience in Medicare managed care. Humana enrollees will be able to use Johns Hopkins hospitals and facilities. Michael E. Johns, M.D., dean of the Johns Hopkins School of Medicine, said the agreement will heighten access to its faculty practice. The affiliation is between Johns Hopkins HealthCare, a limited liability company that represents the health system and the medical school, and Humana Group Health Plan of Washington, D.C. Humana will use primary and specialty physician networks being formed by Johns Hopkins, such as the Wilmer Eye Network and networks in cardiology and pediatrics, and help it develop a "full complement" of other networks.
The board of trustees of Naeve Health Care Association voted to merge the Albert Lea, Minn., health system into the regional operations of Rochester, Minn.-based Mayo Clinic. The association's full membership will consider the proposal Dec. 11. Albert Lea is 20 miles west of Rochester. The 36-physician Albert Lea Clinic joined Mayo Health System in January. If approved, the Naeve system will merge with the clinic by Dec. 31, 1996. It includes the town's only hospital, 115-bed Naeve Hospital, a home-health agency and other specialty providers.
Sharp HealthCare announced late last week that it will sign a letter of intent to form a partnership with Columbia/HCA Healthcare Corp. San Diego-based Sharp said in a written statement that it and Columbia would be equal owners and have equal governance representation in the partnership. Under the proposal, Sharp would remain a not-for-profit, tax-exempt organization. Half the income generated by the partnership would go to Sharp. Four of Sharp's hospitals-Sharp Hospital Chula Vista (Calif.) Medical Center; Sharp Memorial Hospital, San Diego; Sharp Cabrillo Hospital, San Diego; and Sharp Healthcare Murrieta (Calif.),-along with Sharp Mission Park Medical Group, would be contributed to the partnership. Columbia would contribute Mission Bay Hospital in San Diego and its North Coast Surgery Center to the new venture.
More than two months have passed since the start of the government's 1996 fiscal year, and indications from Washington are that lawmakers are no closer to reaching a budget accord than they were Oct. 1. Some believe a compromise may not be reached until sometime next year.
Talks between White House and congressional Republican negotiators got off to a slow start last week, with Republicans calling on the Clinton administration to release its own Medicare reform plan. Late last week, negotiations broke off until early this week.
Democrats, meanwhile, said no budget deal would be possible unless GOP leaders agree to reduce the $245 billion tax cut included in the Republican package and lower the amount of cuts in projected Medicare and Medicaid spending.
Some Democrats on Capitol Hill began assembling a list of desired changes to the GOP budget plan. At the top is retention of a limited Medicaid entitlement.
Under the GOP plan, Medicaid entitlement would be eliminated for nearly all groups-with the exceptions of pregnant women and children with incomes below the federal poverty level and the disabled-in favor of block grants to states.
The GOP plan would reduce projected Medicaid spending by $163.5 billion over seven years, according to the Congressional Budget Office. The CBO projects that under current law Medicaid spending will rise more than 10% annually, from $89 billion this year to $179 billion in 2002.
But Democrats are pushing for what they call a "capped entitlement." Pregnant women, children, the elderly and disabled would still be federally entitled to care, but states would receive a capped amount per beneficiary.
Among the other items on the Democrats' wish list was the elimination of a provision that allows physicians to charge beneficiaries an amount greater than what Medicare reimburses and another that would lower provider payments if budget targets are exceeded.
Many budget negotiators said they were pessimistic that an agreement could be reached this year.
Sen. Edward Kennedy (D-Mass.) said he supported passing a bill that would implement the first year of spending reductions in the GOP plan, then put the policy changes to a vote in next year's presidential election.