Kaiser Permanente's Northwest division and Seattle-based Group Health Cooperative of Puget Sound announced late last week they have begun discussions that could lead to a merger or other joint activities. In a written statement, the companies said "a closer affiliation could include joint marketing agreements, co-development of business and clinical systems or a merger of the two organizations." Group Health Cooperative, its owned affiliate Group Health Northwest and Kaiser Permanente serve more than 1 million people in the Northwest. The managed-care companies cited pressure from healthcare purchasers that want to deal with regional organizations as one reason for the exploratory talks.
Congress last week approved a variety of healthcare measures as it worked on appropriations bills for the next fiscal year. The Senate Appropriations Committee sent to the full Senate an HHS spending bill for fiscal 1997 that ensures payments of more than $1.6 billion to Medicare contractors and intermediaries. That's an increase of $44.6 million from the current budget. Medicare contractors had been facing a possible decrease under spending bills for fiscal 1997, which begins Oct. 1. The HHS spending bill includes a provider-supported clause that would require HCFA and the Agency for Health Care Policy and Research to report by Jan. 1 on the appropriateness of Medicare reimbursement for lung-reduction surgery, which HCFA ended in January. Meanwhile, the House voted 392-17 to support a Senate-passed bill that requires insurers to equalize spending caps on mental health coverage with physical health coverage. The House vote also supported requirements that insurers and managed-care plans pay for 48-hour hospital stays for mothers and newborns.
Only one hospital in Puerto Rico suffered damages from Hurricane Hortense's 100-mph winds last week as the storm killed 12 on the island and then continued its destructive path along the East Coast. Hospital Dr. Federico Trilla, a 220-bed for-profit facility in the town of Carolina, closed for one day because of flooding, said Juan Rivera, vice president of the Puerto Rico Hospital Association. "We had heavy rains that shut down some primary healthcare units in the southern part of the island," Rivera said. "Electricity went out, and we had to go on backup generators. We are OK now." Nearly 20 inches of rain drenched Puerto Rico, shutting down electricity for 1 million of the island's 3 million residents. President Clinton declared Puerto Rico a disaster area after several thousand people were left homeless. Damage estimates were unavailable.
Adventist Healthcare Mid-Atlantic, a not-for-profit system based in Rockville, Md., agreed to buy four ambulatory-care centers in the Washington suburbs for an undisclosed sum. A company spokesman said Adventist acquired the centers from a physician to expand its continuum of services. The four centers are Gaithersburg (Md.) Ambulatory Care Center, Damascus (Va.) Ambulatory Care Center, Frederick (Va.) Ambulatory Care Center and Walkersville (Md.) Ambulatory Care Center.