Continuing its strategy to sell off hospitals, FHP International Corp. signed a nonbinding letter of intent with Paracelsus Healthcare Corp. for Paracelsus to acquire FHP Hospital in Salt Lake City, a 122-bed facility. FHP of Utah will contract with Pasadena, Calif.-based Paracelsus to provide hospital services for FHP enrollees in Utah, who also will be free to use other Paracelsus hospitals in the area. FHP's new physician practice management subsidiary, Talbert Medical Management Corp., will lease space in the medical center from Paracelsus. Under the restructuring by Fountain Valley, Calif.-based FHP, its physicians also treat non-FHP enrollees. A definitive agreement is expected within about 45 days.
The Medical Group Management Association and the American Medical Association will hold their first joint legislation conference in Washington March 10-13. The meeting of the nation's largest physician group and largest association of medical group administrators is a result of their agreement last year to collaborate in advocacy, education, member benefits, research and data collection. MGMA also canceled its 1996 international conference, which had been scheduled for May 19-26 in Vienna, Austria (Jan. 15, p. 40).
Because of a fourth-quarter write-off of $12.2 million in research and development costs assumed in an acquisition, HCIA recorded net losses for the quarter and the year ended Dec. 31, 1995. Excluding the charge, HCIA's operating margins increased to 15% in 1995 from 6% in 1994, noted George Pillari, chairman and chief executive officer of the Baltimore-based healthcare information company. The $12.2 million charge is related to the company's previously announced acquisition of William M. Mercer's CHAMP unit. For the quarter ended Dec. 31, HCIA had a net loss of $5.5 million, or 62 cents per share, compared with net income of $230,000, or 4 cents per share, in the year-earlier period. Revenues jumped 72% to $13.8 million. For 1995, HCIA posted a net loss of $2.4 million, or 31 cents per share, compared with net income of $1 million, or 19 cents per share, in 1994. Revenues increased 56% to $48 million.