Fort Sanders Health System of Knoxville, Tenn., has edged out two other companies that want to lease Cookeville (Tenn.) General Hospital. The Cookeville City Council voted late last week to negotiate with Fort Sanders. The city wants a 40-year lease in a deal that could bring Cookeville a total of $140.9 million. The negotiations will start over the next two months, slowed by a scheduled referendum Aug. 1. The hospital's governing board and medical staff got a ruling last week that the city cannot make a deal before that referendum. The City Council picked Fort Sanders despite an offer of $300,000 more in cash from Columbia/HCA Healthcare Corp., while the amount of an offer from Community Health Systems was not disclosed.
New Jersey Gov. Christine Todd Whitman quickly signed a two-year charity-care funding measure late last week after the state Senate approved it in a 32-7 vote. Earlier this month, the state Assembly voted 55-17 to approve it. The new financing plan ends a drawn-out debate over how to subsidize charity care in the state. The previous funding law expired last December, and hospitals received their final payment in January. Under the new law, hospitals will get $310 million this year and $300 million next year. The New Jersey Hospital Association had hoped for at least $350 million a year and preferred more than a two-year remedy. Even so, NJHA President Gary Carter welcomed the end of the legislative deadlock and the resumption of payments to hospitals. "It's much-needed and long-overdue relief," he said.
Faced with a $20.3 million deficit at University of California San Diego Medical Center, the University of California Board of Regents committee on health services has approved layoffs of 500 hospital-based staff and a plan to seek partners for the system. The loss this fiscal year, blamed primarily on declining census and lower payments under managed care, is $16 million more than projected. "We plan to talk to everyone in town," including both public and private organizations, a UCSD spokeswoman said. In addition to 442-bed UCSD Medical Center, the system includes 120-bed John M. and Sally B. Thornton Hospital in La Jolla, Calif.; ambulatory-care services; physician practices; a cancer center and other services. Through restructuring and integration the system hopes to save $25 million to $30 million in the fiscal year beginning July 1.
â¬Cleveland-based Sisters of Charity of St. Augustine Health System has established three foundations and endowed them with $200 million using proceeds from its joint venture with Columbia/HCA Healthcare Corp. The foundations are charged with carrying out the Sisters' stated mission to serve in the areas of health, education and social services. The Sisters sold 50% of its assets to Columbia last year. In 1994, it reported assets of $438 million. Establishment of the foundations was part of the deal. Columbia also agreed to pay $88 million of the Sisters' debt. Columbia has said that its total cash commitment to the purchase would be $400 million to $500 million, not including the undisclosed purchase price. Of the proceeds, $50 million will go to a fund in Cleveland, $70 million to a fund in Canton, Ohio, and $80 million to a fund in Columbia, S.C. Amounts are based on valuations of the Sisters' hospitals in each community. The foundations will begin making grants in the first quarter of 1997.
The family of a Framingham, Mass., man who died of a drug overdose has been awarded $1.6 million by Middlesex Superior Court jurors because the Harvard Community Health Plan did not hospitalize him. Dean Howard Lande, who had a history of substance abuse and had been active in Alcoholics Anonymous, died in his Framingham apartment in 1988 from an overdose of morphine and cocaine. Thomas Braun, the lawyer for Lande's estate, said HCHP, instead of hospitalizing Lande, offered him weekly psychotherapy sessions and narcotics to ease pain and stress. He said an HCHP staffer mistakenly thought the man had to be using drugs to be eligible for hospitalization. William Dailey, a lawyer for HCHP, said the plan will appeal the verdict. "We are very disappointed. We thought the care that was provided was very good. We thought the HCHP staff did a very good job trying to follow up," Dailey said.
HCIA said it has acquired Response Healthcare Information Management for $6.2 million in cash. The deal builds HCIA's core database and data-handling capabilities, said George Pillari, chairman and chief executive officer of the Baltimore-based healthcare information company. Response, an East Greenwich, R.I.-based company with $2.6 million in 1995 revenues, specializes in capturing and analyzing outcomes and patient-satisfaction data, HCIA said. In connection with the acquisition, HCIA said it expects to record a one-time charge in the quarter ended June 30.