Aggregate profits generated by the nation's acute-care hospitals jumped 17.3% in 1994 to a record $13.8 billion, according to figures released late last week by the American Hospital Association. That represents a 4.7% profit margin, up from a 4.2% margin in 1993, AHA figures show.
Prices for acute-care hospital services rose 0.3% in February, matching January's increase, according to the U.S. Labor Department's Producer Price Index released last week. For the 12 months ended in February, hospital prices were up 2.9%. The PPI measures changes in net revenues per episode of care.
HMOs added 7.7 million new enrollees between July 1, 1994, and July 1, 1995, the largest 12-month gain ever, according to InterStudy, a Minnesota-based managed-care research organization. Total HMO enrollment at the end of the period was 54 million. Meanwhile, the number of plans rose by 46 to 593. Ten of the new plans were sponsored by hospital corporations, physician groups and other provider organizations. The ratio of HMO enrollees in provider-sponsored plans remained steady at about 10%. Growth in traditional HMO products accounted for most of the new enrollees, but plans that offer open-ended provider panels grew fastest by converting enrollees in open-ended plans to their traditional HMOs.
The U.S. Labor Department last week focused on the healthcare industry as it issued its first guidelines to reduce assaults on workers. Nearly two-thirds of all workplace violence occurs in the healthcare industry. Victims include physicians and nurses, pharmacists, nurses' aides and home-care workers. Labor Secretary Robert Reich said healthcare workers "often face aggressive patients, visit clients' homes in dangerous neighborhoods, encounter violent situations in hospital emergency rooms or face other dangerous situations." Homicides are now the second leading cause of death on the job,
Reich added. The report's suggestions for improving safety include installing metal detectors to reveal weapons, installing alarm systems or panic buttons, allowing for at least two exits, and arranging furniture to prevent entrapment.
Congress last week was moving toward approval of a measure that aims to jump-start initial Medicare quality-certification surveys in 20 states. An omnibus spending bill that would fund the operations of HHS for the rest of fiscal 1996, which began Oct. 1, 1995, includes a provision that would free up $8 million for surveys to certify new Medicare providers. The bill would do so by increasing the interval between standard surveys of home health providers to 36 months from 15. In addition, a coalition of hospital, long-term-care and other provider groups wants lawmakers to add a provision that would allow accreditation by HCFA-approved private-sector organizations to be accepted as certification for participation in the Medicare program. The coalition also wants HCFA-approved surveys by private-sector accrediting organizations to be recognized for certification of compliance with Medicare regulations.
Baxter International will run a service center for the five hospitals of Methodist Healthcare System of San Antonio under an extensive, five-year contract. The company will provide not only stockless distribution but also other materials management services, including supply standardization and linen management. Baxter said the agreement could produce $40 million in net savings for Methodist over five years. It expects sales of $115 million under the contract.
A Douglas County District Court judge in Omaha, Neb., last week cleared the way for a trial to determine whether Columbia/HCA Healthcare Corp. may proceed with its proposed purchase of Bishop Clarkson Memorial Hospital in Omaha. In a 41-page decision, Judge John Hartigan Jr. ruled in favor of the University of Nebraska Medical Center, which claims a 1953 agreement gives it first purchase rights to Bishop Clarkson. Factual issues regarding the contract will be decided at the trial, expected to begin in two to three months.
Community Health Systems has signed a long-term lease with 49-bed Mimbres Memorial Hospital, a Deming, N.M., facility owned by Luna County. Terms weren't disclosed, but the hospital has $12 million in annual revenues. Nashville, Tenn.-based CHS now operates 42 hospitals in 18 states.