President Clinton was scheduled to meet late last week with House Speaker Newt Gingrich (R-Ga.) and Senate Majority Leader Bob Dole (R-Kan.) to resume budget negotiations, but aides to both sides tried to keep expectations low. Earlier in the week, Gingrich said Republicans would not agree to end the partial government shutdown until a deal was struck. The shutdown has been in effect since late last month. Among those not being paid are some employees of Department of Veterans Affairs hospitals. Several GOP lawmakers last week said they had received hundreds of phone calls from VA hospital nurses opposing the government shutdown.
Columbia/HCA Healthcare Corp. has agreed to buy Cape Fear Memorial Hospital in Wilmington, N.C. Columbia will review Cape Fear's books and work out details of the sale, which is expected to be completed by the end of March. Officials would not reveal how much Columbia has offered nor if it was the highest of the seven bids the hospital received. They did confirm that the figure is at least $47 million. The 90-bed, not-for-profit facility has $17 million in debt. Cape Fear has struggled for the past year and a half, mostly because of its inability to land managed-care contracts. Columbia owns or leases six hospitals in North Carolina.
California's attorney general's office is investigating a $43 million loss reported for the year ended June 30 by San Jose-based Good Samaritan Health System, which was to be acquired by Columbia/HCA Healthcare Corp. by the end of 1995. The loss is about half the system's net worth, said James Schwartz, a deputy attorney general. Although the attorney general is not investigating the sale itself and will not block it, the investigation will look into whether the not-for-profit system's officials caused the huge loss by not operating according to reasonable business standards. If a breach of trust is found, the state could sue. The proceeds would be used to augment the $56 million now slated to go into a charitable foundation, under a state law governing conversions to for-profit status, Schwartz said. Columbia is buying the system for $165 million. Although Consumers Union's San Francisco office charged in a letter to the attorney general that the system is worth about $100 million more, Schwartz said "there is no evidence that the board committed any breach of trust attendant to the sale itself. There is no widespread discrepancy between valuation and sale price." But without the huge loss, the three-hospital system would be worth more, and thus more money would be going to the charity.
A judge late last week issued a restraining order barring Columbia/HCA Healthcare Corp. from removing equipment, supplies or fixtures from University of Louisville (Ky.) Hospital during the transition of management there. A state Circuit Court granted the order in a lawsuit filed by the state of Kentucky. Gov. Paul Patton's office issued a statement citing a long series of attempts to work out the transition process with Columbia. Nashville, Tenn.-based Columbia currently is managing the hospital, which will be operated soon by a joint-venture management team called University Medical Center. Patton telephoned Columbia President Richard Scott late last month to try to resolve the issues, the statement said. The state and the University of Louisville terminated the management contract with Columbia in February. The new contract was awarded in October, and UMC assumes responsibility for the hospital Feb. 6. The state also is seeking an injunction to allow access to hospital records and employees. A hearing is expected this week.
WellPoint Health Networks and its parent, Blue Cross of California, signed a settlement with Health Systems International formally terminating the merger agreement they reached last March. The settlement releases all claims among the Woodland Hills, Calif.-based companies. The proposed merger fell apart last month, apparently as a result of a power struggle between Malik Hasan, M.D., HSI's president, chairman and chief executive officer, and Leonard Schaeffer, Blue Cross' chairman and CEO, over who would oversee the new company's merger activities. The deal called for WellPoint to acquire HSI for $1.6 billion, creating the second-largest for-profit managed-care company, with annual revenues of $6 billion and nearly 5 million enrollees. The merger also would have established charitable foundations worth $3 billion as part of Blue Cross' obligation to the state in converting to for-profit status.
Kaiser Permanente has proposed a contract to nurses in Southern California that would pay them bonuses if they help discharge patients from hospitals faster.
The contract is under discussion between the giant HMO and the United Nurses Associations of California, which has 4,900 member nurses, physician assistants and nurse practitioners.
The contract provision was disclosed by the Los Angeles Times, which obtained a copy of a memo written by the president of the United Nurses. Neither Kaiser nor the union would discuss the proposal, which the union will present to its members this month.
Kathleen Barco, Kaiser spokeswoman for Southern California, declined to comment, saying the union and the HMO agreed to have no prior public discussion of contract terms.
Generally, she said, "Our philosophy is to provide incentives to employees for team effort across the board. Incentives never interfere with delivery of appropriate care."
The proposal would award bonuses to nurses who help increase enrollment and reduce costs. In some cases, the bonuses would offset wage reductions for nurses.
Doctors in the Permanente Medical Group already receive bonuses based on attaining certain goals. Permanente doctors recently dropped incentives that rewarded them for shortening hospital stays and prescribing less-costly drugs.
This is believed to be the first time nurses would receive similar incentives.
Jamie Court of Consumers for Quality Care in Los Angeles said: "It's shameful that Kaiser is putting nurses in the position where they'll have to choose between advocating for the highest quality for patients in their charge and meeting their car payments and grocery bills."
Rose Ann DeMoro, executive director of the California Nurses Association, which represents Kaiser nurses in Northern California, called it "the Kaiser Permanente morbidity bonus. It's a sad day in medicine once again."
The CNA has fought an extended public relations battle against Kaiser, trying to persuade consumers that Kaiser has lowered its patient-care standards to save money.