Not-for-profit Barberton (Ohio) Citizens Hospital signed a letter of intent to be acquired by a joint venture of Quorum Health Group, Akron, Ohio-based Summa Health System, and Cleveland Clinic. Brentwood, Tenn.-based Quorum will manage the 297-bed hospital and own 95% of it. Summa and Cleveland Clinic will own the other 5%. The purchase price was not disclosed. The hospital will become part of Cleveland Health Network for managed-care contracting. The venture will establish a foundation with at least $75 million to compensate the community for the loss of not-for-profit assets, said Kevin McQuaide, Barberton Citizens' vice president of business development. Local voters probably will have to vote in November to change an agreement between the city and the hospital to allow the deal to go forward, McQuaide said.
Three hospitals in Massachusetts-Holyoke (Mass.) Hospital, Noble Hospital in Westfield and Wing Memorial Hospital and Medical Centers in Palmer-announced affiliations with University of Massachusetts Medical Center in Worcester. The move establishes clinical and educational links between the central Massachusetts tertiary teaching hospital and facilities serving the western part of the state. All three hospitals retain their local ownership, governance and financial operations and remain legally separate from the university facility. The affiliation will provide additional access points in the healthcare network for managed-care contracts, said Hank Porten, Holyoke's president, and medical information systems also will be combined. The university hospital already has varying degrees of affiliation with nine community hospitals in central Massachusetts and northeastern Connecticut. Holyoke and Noble also are longstanding partners with Baystate Health Systems of Springfield in a 67,000-enrollee HMO called Health New England. Baystate agreed earlier this month to buy out the partners but expressed confidence that they would remain in the HMO's provider network (June 17, p. 36). Porten said Holyoke has contracted with a number of managed-care organizations, and the affiliation doesn't infringe on the hospital's ability to continue multiple contracting arrangements.
U.S. District Judge Charles Kocoras approved a $350 million settlement in a lawsuit accusing drugmakers of illegally discriminating against retail pharmacies. The 11 companies participating also promised not to arbitrarily deny discounts to retail stores. Nine companies didn't agree to the settlement, and they await trial. A second case also charges drug companies with illegally setting higher prices for retail stores than for HMOs, mail-order pharmacies and hospitals. That case also is pending in U.S. District Court in Chicago. The settlement could help retail pharmacies obtain volume discounts, several hospital purchasing groups have said. But it isn't likely to result in retail prices equivalent to hospital prices, nor is it likely to erode prices in the hospital market (May 13, p. 26). John Rector, general counsel for the National Association of Retail Druggists in Alexandria, Va., said the association is "very pleased" with the approval of the settlement.
Cape Coral (Fla.) Hospital's CCC bond rating is poised for an upgrade. Standard & Poor's Corp. placed the rating on CreditWatch with positive implications because of Lee Memorial Health System's pending purchase of the hospital. Cape Coral has $89 million in unenhanced debt and $44.5 million in AMBAC-insured debt. Under the purchase agreement, all of Cape Coral's existing debt will be paid in full plus accrued interest, the New York-based rating agency said. The purchase is expected to occur within 60 days. At that time the rating will be adjusted, Standard & Poor's said.
Standard & Poor's Corp. has revised its CreditWatch outlook on Baxter International's A- long-term-debt rating and A-2 commercial paper rating to "positive" from "developing." The New York-based credit-rating agency said the ratings will be raised to A and A-1, respectively, if Baxter's divestiture of Allegiance Corp., its distribution and surgical products business, is completed as planned. The ratings of Deerfield, Ill.-based Baxter were placed on CreditWatch Nov. 27, 1995.