Major Nevada hospitals had combined net income of $97.9 million last year, but a state official said last week the state is well below its highest-in-the-nation healthcare cost status of 10 years ago. Hospitals in smaller urban and outlying areas added another $24.5 million net income in 1995, bringing the statewide total to more than $122 million. However, several small rural hospitals showed revenue declines. A big chunk of hospital earnings came from endowment funds and taxpayer support. When those funds are taken out, the statewide profit from operations totals $82.9 million. The $97.9 million bottom line for the "Big Six" hospitals located in the state's urban centers of Reno and Las Vegas compares with $70.9 million in 1994, according to a state Human Resources Department report. A "Big Six" breakdown shows 1995 profits per admission were $833 at Desert Springs Hospital in Las Vegas; $787 at Valley Hospital Medical Center, Las Vegas; $760 at Washoe Medical Center, Reno; $540 at St. Mary's Regional Medical Center, Reno; and $517 at Sunrise Hospital and Medical Center, Las Vegas. University Medical Center, a government-subsidized hospital in Las Vegas that handles many welfare patients, had negative $284 in the "profits" column. Washoe was the most profitable hospital in the state last year, accounting for $31.8 million of the $97.9 million net income total for the "Big Six." That's up from $16.4 million in the previous year.
Bates Medical Center in Bentonville, Ark., has accepted a merger proposal from Northwest Medical Center of Springdale, Ark. Bates is a 40-bed community hospital owned by the city, which must sign off on the merger. Northwest is a 225-bed community hospital with 1995 revenues of $86 million. Hugh Means, Northwest's chief executive officer, said the hospitals intend to combine operations and function as one organization with two campuses. No money will change hands. Bates also considered a proposal from St. Mary's Hospital of Rogers, Ark., owned by the Sisters of Mercy Health System in St. Louis.
Harris Methodist Health System, Fort Worth, Texas, has completed an agreement to be a co-sponsor of St. Paul Medical Center, Dallas. Under the agreement, St. Paul will remain an affiliated member of St. Louis-based Daughters of Charity National Health System's West Central region. St. Paul also will continue to be operated as a Roman Catholic hospital, and its board will retain responsibility for budgeting and strategy. Harris Methodist is a six-hospital system that operates Harris Methodist Health Plan, Fort Worth's largest HMO.
Shareholders filed a lawsuit against Horizon/CMS Healthcare Corp. in federal court in Albuquerque, N.M., last week, contending the company artificially inflated the value of its stock. Meanwhile, a spokesman declined to comment on the suit's allegations and denied separate reports of improper insider trading. He said a six-month ban on trading had been lifted temporarily when company directors and officers sold approximately $37 million worth of shares. Those transactions took place in the weeks before March 1, the day Horizon's stock price dropped 24% to $17.88 in New York Stock Exchange trading. The company had announced it anticipated disappointing results for the third quarter ended Feb. 29. Five company insiders sold 1.4 million shares, according to documents filed with the Securities and Exchange Commission. In addition, the company disclosed March 15 that it's the subject of a federal Medicare billing investigation. Horizon recorded a charge of $5.1 million in the third quarter related to the probe. Also, the company's plans to acquire Pacific Rehabilitation and Sports Medicine fell through April 1, the same day it withdrew a previously filed $200 million debt offering. Albuquerque-based Horizon/CMS provides post-acute services nationwide.
The healthcare consulting firm TriBrook Group of Westmont, Ill., has merged with Altschuler, Melvoin & Glasser, a national consulting and accounting firm. Tribrook Group, which has 25 employees, said its name will change to TriBrook/AM&G. The merger combines TriBrook's specialty in the healthcare industry with AM&G's "national resources and accounting and consulting expertise," said Douglas Rich, president of TriBrook/AM&G. The firms wouldn't disclose the value of the deal or either company's annual billings. AM&G has 550 employees in Chicago, Los Angeles, New York, Phoenix and Washington. TriBrook's Westmont and Tampa, Fla., offices will be maintained.
Interns and residents at Howard University Hospital in Washington voted to strike this week unless hospital officials recognize their union. The hospital said the interns and residents are students not employees and therefore have no right to unionize. The group staged a three-hour sit-in after which they demanded the hospital recognize their union or they would strike. In a statement, Howard University Hospital officials said they "deplore the tactics" and vowed they would "not be intimidated."