West Virginia's largest hospital has agreed to acquire one of the state's smallest for $2.3 million, the hospitals announced last week. The acquirer is Camcare, the parent of 776-bed Charleston (W.Va.) Area Medical Center, the state's largest hospital. The hospital to be absorbed into the Camcare system is 30-bed Braxton County Memorial Hospital in Gassaway, some 47 miles northeast of Charleston. On May 20, Braxton's nine-member board voted to accept Camcare's offer, which extinguishes $1.6 million in various debts owed by the county facility and includes $750,000 in cash. After the two parties draw up a final agreement, which is expected sometime this summer, they'll seek approval from the West Virginia Health Care Cost Review Authority.
Standard & Poor's Corp. placed Bedford (Ind.) Regional Medical Center's BBB- rating on CreditWatch with negative implications because of "significant losses from operations and extremely thin liquidity." The New York-based rating agency said Bedford's merger with 30-physician Edgewood Clinic contributed to the hospital's financial troubles because of salary and benefit costs for physicians and the added expense of purchasing unavailable services for the 5,000 capitated lives covered by the clinic. The hospital's audit for the year ended Sept. 30, 1995, shows a $4.2 million loss on operations, compared with a $1.8 million loss in the previous year.
Woodland Hills, Calif.-based Health Systems International has adopted a stockholder rights plan intended to ward off hostile takeovers. Under the plan, one right will be issued for each outstanding share of Class A and Class B common stock. The rights become exercisable if any person acquires 15% or more of the Class A stock or the HSI board declares a holder of 10% or more of the stock to be an "adverse person," HSI said. There have been no rumblings of a hostile takeover, a spokesman said last week.
R. Judd Jessup, president of FHP International Corp.'s HMO division, has resigned effective June 18, when his two-year employment contract with FHP expires. Jessup, former president and chief executive officer of TakeCare, joined Fountain Valley, Calif.-based FHP when it acquired TakeCare in June 1994. "Jessup has made a valuable contribution to the company since the merger. Jessup's immediate plans are to pursue personal interests," FHP said in a written statement.. An industry source who asked not to be identified said Jessup is leaving because of "a power struggle" with FHP President and CEO Westcott W. Price III. An FHP spokeswoman denied this was the case. Responding to intense competition and stagnant enrollment in its staff-model HMO, FHP last July began restructuring from a vertically integrated organization. It has sold hospitals and placed its physician clinics in a separate company.
HBO & Co., an Atlanta-based healthcare software and services company, last week announced a definitive agreement to acquire CyCare Systems, a Scottsdale, Ariz.-based software and services vendor to physician groups. The acquisition is expected to close in the third quarter of 1996. The companies announced their intent to merge earlier this month (May 20, p. 36). CyCare's shareholders will receive 0.43 of a share of HBO & Co. common stock for each share of CyCare common stock as long as the average HBO & Co. share price remains between $104.50 and $130 during the 20 trading days preceding a meeting of CyCare shareholders to vote on the transaction. If the share price exceeds $130, the fraction of stock will be set to equal a value of $55.90 per CyCare share. With 5.1 million shares of CyCare stock outstanding, that would make the transaction worth $285 million.
Donald Sibery, 48, has been named president and chief executive officer of the system that will be created through the proposed $330 million merger of Central DuPage Hospital in Winfield, Ill., and Edward Hospital in Naperville, Ill. Sibery, who is leaving his post as president and CEO of Community Health Care of Wausau, Wis., after 11 years, begins his new job next month, just before the scheduled July 1 completion of the merger in Chicago's western suburbs. Jim Anderson, 64, president and CEO of Central DuPage's parent company, Central DuPage Health System, will retire next month while Pamela Meyer Davis, 47, Edward's president and CEO, is expected to stay on in some capacity. The two hospitals committed to a full-asset merger after beginning exclusive discussions earlier this year (April 1, p. 14).