The New York City Health and Hospitals Corp. is consolidating two of its five long-term-care hospitals for a savings of $8 million in the first year. Coler Memorial and Goldwater Memorial hospitals are both located on Manhattan's Roosevelt Island. HHC President Luis Marcos, M.D., revealed consolidation plans at last week's board of directors meeting. He tapped Samuel Lehrfeld, Goldwater's executive director, to head both facilities. Duplicate staff positions will be eliminated by consolidating some administrative and clinical services, including the hospitals' ventilator programs. However, 1,025-bed Coler and 986-bed Goldwater will continue to be licensed as separate facilities, Lehrfeld said. Since taking office last fall, Marcos has streamlined HHC by removing 900 empty beds from service and reducing central office staff by 15%.
Goddard Claussen First Tuesday will lead the Group Health Association of America's strategy to redefine managed care's public image. The Sacramento, Calif.-based political consultant created "Harry and Louise" for the Health Insurance Association of America during the national healthcare reform debate (See related story, p. 8). The GHAA will soon announce details of a program to counter the recent spate of negative media stories about HMOs, said Susan Pisano, GHAA director of communications. The program will work "with all the important audiences, especially patients, physicians, employers and policymakers." Even if media coverage was not a problem, "the time is right" for an educational campaign because so many new enrollees are joining HMOs, she said. The GHAA's campaign will not be "based on advertising," though it will include it, she said. The group has devoted $250,000 to research and planning, but the total amount for the campaign is not known, she said.
MedCath said it expects to receive Medicare and Medicaid certification for its first heart hospital after a compliance survey last week. Last December, Charlotte, N.C.-based MedCath reported that a survey of McAllen (Texas) Heart Hospital was delayed because of budget problems at HCFA. A survey was conducted last week by the Texas Department of Health, and certification should be retroactive to Jan. 25, MedCath said. Open one week, the McAllen facility had 26 of its 70 beds filled, MedCath said. McAllen hosted 65 diagnostic catherization procedures, 10 angioplasty procedures and five coronary artery bypass graft surgeries in its first seven days.
AMBAC has proposed cashing out its 46.4% stake in HCIA, a Baltimore-based healthcare information company, through a sale of senior debt securities. The securities, which mature in 2001, are exchangeable for shares of HCIA stock. New York-based AMBAC, whose subsidiaries provide bond insurance and other financial services, may fully or partially redeem the debt securities after three years. With shares of HCIA trading in the $45 range, the proposed offering is worth $187 million to AMBAC. AMBAC owns nearly 4.2 million shares of HCIA common stock. AMBAC is selling its stake in HCIA because the rating agencies don't consider the investment when assessing the company's creditworthiness, said John Cathey, an AMBAC spokesman. "We're basically looking to monetize our investment," he said. The debt structure of the offering enables AMBAC to defer certain taxes, Cathey said. And, by holding its stake through 2001, AMBAC also retains the potential to participate "in the upside" if HCIA's stock should appreciate, noted Jean Chenoweth, an HCIA senior vice president.
A Feb. 5 hearing has been set in a lawsuit challenging the legality of a Medicare policy that denied payment for investigational devices. The government has asked that the suit be dismissed, and the U.S. District Court in Los Angeles will hear its arguments. About 25 hospitals filed suit, arguing that the government failed to follow rulemaking procedure when it adopted the policy (May 15, 1995, p. 26). Medicare now covers most investigational devices after intense lobbying by hospitals and the device industry (Sept. 18, 1995, p. 17). Still pending, however, is a whistleblower lawsuit accusing dozens of hospitals of fraudulent billing. A hospital victory in Los Angeles court could disable that suit.