Universal Health Services, a King of Prussia, Pa.-based hospital chain, agreed to buy four psychiatric hospitals from First Hospital Corp., Norfolk, Va., for $33.5 million. The investor-owned chain may pay up to $8 million more, depending on the hospitals' operating performance, Universal officials said. The deal also includes seven contracts to manage behavioral healthcare programs. Universal currently owns 30 hospitals and 26 ambulatory centers. First Hospital is a division of FHC Health Systems, which has been divesting hospitals as it shifts into managed-care contracting in behavioral health. FHC includes FHC Options, which provides coverage to about 5 million people through a variety of government and commercial contracts.
Humana reported net income of $53 million, or 32 cents per share, in the first quarter ended March 31, the same figures as in the year-ago quarter. Revenues grew 52% to $1.6 billion. The revenue increase is primarily due to Humana's acquisition of Emphesys Financial Group last October. The Louisville, Ky.-based managed-care company also announced Medicare-risk gains of 11,900 enrollees in the first quarter, more than double last year's first-quarter addition of 5,100 enrollees.
The 270-bed Medical Center in Beaver, Pa., and 221-bed Sewickley (Pa.) Valley Hospital said May 1 that they intend to merge into a new parent organization called Valley Health System. The two hospitals, with combined annual revenues of $227 million, have filed for federal antitrust approval. Structural organization of the merger is being finalized and is expected to be completed early this summer.
Community Care of America, Naples, Fla., has acquired 71-bed Smith Hospital, Hahira, Ga., for $6.1 million from Memorial Health Services, Adel, Ga. With Smith Hospital, Community Care now operates six rural hospitals, 64 long-term-care facilities, four physician practices, seven primary-care clinics and several other healthcare-related companies primarily serving rural areas. Memorial, a for-profit rural hospital chain, now owns six hospitals with 412 beds in Georgia.
The board of Hialeah (Fla.) Hospital signed a definitive agreement to sell the 411-bed facility to Tenet Healthcare Corp., Santa Monica, Calif. The deal is expected to be completed by the end of the month. The not-for-profit facility will join six other hospitals in Tenet's South Florida network.
The Robert Wood Johnson Foundation has awarded the Atlanta-based Institute for Diversity in Health Management a $90,000 grant to fund the creation of a database that will link employers with minority individuals who are seeking positions in healthcare administration. The American Hospital Association, the American College of Healthcare Executives and the National Association of Health Services Executives created the institute in 1994 to help expand healthcare leadership opportunities for minorities and increase the number of minorities in the field. Employers will be able to use the new database to search for qualified minority candidates, while minority job-hunters can use the program to find openings.
Birmingham, Ala.-based MedPartners/Mullikin acquired Cardinal Healthcare, a 75-physician multispecialty group in Raleigh-Durham, N.C. Cardinal has 16 clinical facilities and 15 satellite offices in addition to its main campus. It's affiliated with almost 500 physicians in three independent practice associations, which have managed-care contracts for almost 6,000 enrollees, MedPartners/Mullikin said. The transaction will be accounted for as a pooling of interests.
AMBAC offered nearly 4.2 million shares of stock in HCIA, a Baltimore-based healthcare information company, in a public offering last week. The price per share was $51, yielding net proceeds of about $202.6 million. As previously announced, the New York-based financial services company sought to cash out its 46% stake in HCIA because the investment wasn't considered by rating agencies in their assessment of AMBAC's creditworthiness.