Sounding another knell for the traditional fee-for service system, most enrollees in the nation's 62 Blue Cross and Blue Shield plans are now in managed-care networks. As of the end of the first quarter of 1966, 34.6 million enrollees, or 52% of total enrollment in Blues plans, receive healthcare through an HMO, PPO or point-of-service network. "This is a monumental shift of business for the Blues," said Patrick Hays, president and chief executive officer of the national Blue Cross and Blue Shield Association. The Blues system gained 1 million enrollees last year, bringing total enrollment to 66.3 million, or about 25% of the U.S. population.
Surgical supplier Circon Corp. urged stockholders to reject a $230 million offer by U.S. Surgical Corp. Late last week, its board also adopted provisions designed to thwart a hostile takeover. The provisions entitle other stockholders to discounts on Circon stock should 15% or more be acquired by one organization. Circon insiders own about 25% of its stock. "Execution of our strategic plan will generate superior value for our stockholders; we have no need to sell the company in order to realize that value," said Richard Auhll, Circon board chairman, president and principal stockholder. The Santa Barbara, Calif.-based company, with annual sales of about $160 million, is the largest maker of advanced endoscopes and video systems for minimally invasive urological and gynecological surgery. U.S. Surgical launched its unsolicited offer earlier this month. The Norwalk, Conn.-based company said it believed the acquisition would bolster its efforts to be a one-stop shop for surgical products.
PhyCor has acquired the assets of Gulf Coast Medical Group, a multispecialty physician clinic in Galveston, Texas, and has entered a long-term service agreement with its 38 physicians. Terms of the transaction were not disclosed. The deal increases PhyCor's operations in Texas to eight multispecialty clinics with 350 affiliated physicians and 1,800 doctors in independent practice associations. Eight-six percent of Gulf Coast's doctors are in primary care. It and was formed by the merger of three physician groups and has 10 service sites stretching from the southeast of Houston to Galveston. The group provides care under capitation for 19,500 patients.
Medicare could save $1.6 billion over seven years if it employed competitive bidding for medical supplies and home medical equipment, according to a report released by Sen. Tom Harkin (D-Iowa). The report, compiled by Harkin's staff, compared Medicare's rental rates and purchase prices for 18 different items or supplies with what the Department of Veterans Affairs paid through competitive bidding practices. The National Association for Medical Equipment Services disputed the report, saying it misinterpreted the differences between Medicare and the VA's methods of paying medical equipment suppliers.
The Federation of American Health Systems last week added two Capitol Hill healthcare advisers to lobbying positions. Laura Steeves Gogal, a healthcare aide to former Sen. John Danforth (R-Mo.), was named vice president and chief counsel. Jason Altmire, a healthcare aide to Rep. Douglas "Pete" Peterson (D-Fla.), was named assistant vice president for legislation.