Michigan Capital Healthcare in Lansing approved a 50-50 joint venture with Columbia/HCA Healthcare Corp. The deal will make 369-bed Michigan Capital Medical Center the first for-profit acute-care hospital in the state. Michigan Capital is the product of a 1992 merger of Ingham Medical Center and Lansing General Hospital. Several organizations have called for full disclosure of the deal. State Attorney General Frank Kelley wants assurance that charitable assets will be protected. Michigan Capital reported 1995 net income of $2 million on revenues of $191.3 million, with total assets of $126 million. In 1994, it had 38% of inpatient admissions in the Lansing market. Its two competitors, Sparrow Hospital and St. Lawrence Hospital and Healthcare Services, which is owned by Mercy Health Services, recently acknowledged they were in affiliation talks. The Michigan Capital deal is expected to close in July.
Both acute-care hospitals in Massillon, Ohio, agreed last week to be acquired by for-profit ventures. Massillon (Ohio) Community Hospital, which has 268 beds, will become part of a joint venture of Columbia/HCA Healthcare Corp. and Sisters of Charity of St. Augustine Health System, Cleveland. A definitive agreement is expected to be completed by July 31. Meanwhile, 180-bed Doctors Hospital of Stark County agreed to be acquired by a joint partnership of Akron, Ohio-based Summa Health System and Brentwood, Tenn.-based Quorum Health Group. The sales will change both hospitals to for-profit organizations, with proceeds going to community foundations.
The board of Memorial Hospital of Salem County in Salem, N.J., voted last week to fire Joseph Michael Galvin Jr., 50, the hospital's longtime chief executive, for misuse of hospital funds. Officials said the alleged misappropriations were discovered during a routine financial audit of 1995 results. Paul Fredricks, senior vice president and director of fiscal affairs for the past 20 years, also was dismissed for failing "to properly exercise his responsibility for oversight" of the expenditures. The Bridgeton (N.J.) Evening News said sources indicated that "tens of thousands of dollars" were involved, but Board Chairman Ernest Jolly would neither confirm nor deny the report. Galvin, who was appointed administrator in 1971 and became CEO in 1981, had been on a paid leave of absence negotiated by the board May 8. He could not be reached for comment at deadline.
Nurses believe the quality of care in hospitals is declining, bringing adverse outcomes for patients, according to a survey to be published soon in the American Journal of Nursing. Sixty-seven percent of nurses say the quality of nursing care at their institutions fails to meet their professional standards, and 37% would not recommend that a family member receive care where they work. "The survey is designed to find out if and how nursing practice has changed due to restructuring," said Boston College professor Judith Shindul-Rothschild, who developed the project. What makes the study significant, she said, is the huge sample-now 5,000 and still growing-which makes it "difficult to find any justification for people to dismiss what nurses say is happening." An early summary of the data was made available to MODERN HEALTHCARE. Generally, the results would suggest that medication errors, hospital infections and secondary complications all have increased, although the majority of nurses say they have stayed about the same. However, 55% of nurses said patients and families are complaining a lot more. Nurses split evenly on whether they are seeing more, or fewer, unexpected patient deaths. Preliminary results of the survey will be made public next week in conjunction with the American Nurses Association's centennial conference in Washington.
Apria Healthcare Group said it will introduce a hospice unit by purchasing Vitas Healthcare Corp., the nation's largest hospice-care company. The $212 million transaction, structured as a pooling of interests, makes Vitas a wholly owned subsidiary of Apria. Both companies serve patients with diagnoses such as cancer, congestive heart failure, chronic obstructive pulmonary disease and AIDS. Vitas, which will continue to operate under its own name, posted $230 million in revenues for fiscal 1995. It has regional operations in six states. Apria, a leading home-care provider based in Costa Mesa, Calif., provides care through 350 locations nationwide.
Humana said its second-quarter earnings will be disappointing because of an unusually high number of claims for treatment in most of its markets. The managed-care company said it was continuing to lose money in Washington and other new markets and was considering pulling out of some areas. Humana said it expects earnings to total 18 cents to 22 cents per share in the quarter ending June 30, compared with 28 cents per share in the year-ago quarter. Analysts have been expecting profits to average 33 cents per share. In its announcement, the company said it was considering restructuring, selling or closing operations in money-losing markets.