Officials at George Washington University Medical Center in the District of Columbia said they were close to selling their 280-bed hospital and 90,000-enrollee health plan in separate deals. Officials said they were in "very intense negotiations with more than one potential partner" to sell each entity. Kaiser Permanente's mid-Atlantic plan, with 400,000 enrollees, was said to be the leading contender to buy the health plan, but Kaiser officials said several others were in the running. GWU also is negotiating to sell its hospital but didn't name the interested parties. Columbia/HCA Healthcare Corp. in the past has expressed interest in purchasing the hospital. GWU Medical Center's chief executive officer, Thomas W. Chapman, 51, recently resigned to work on urban healthcare issues and will remain at the university, teaching in the School of Public Health.
BJC Health System and Washington University Medical School in St. Louis will spend $225 million rebuilding the campus of Barnes-Jewish Hospital to make it more efficient and patient-friendly. Outpatient and diagnostic services will be concentrated in a new ambulatory center on the north side of the campus, while high-intensity and surgical services will be delivered on the south side. Obsolete structures will be demolished and a parklike ambience will be created. The plan requires certificate-of-need approval. Construction is expected to begin in spring 1997. The system will finance the project through existing capital and ongoing operating revenues.
Denver's public health system crossed the final hurdle to independence last week when the Denver City Council gave the go-ahead to a reorganization. Three critical contracts, approved by a 9-4 vote, will allow the Denver Department of Health and Hospitals to operate as an independent public authority by Jan. 1, 1997. The conversion has been in the works for nearly three years. Advocates of the conversion argued that the public health system might not survive unless it was freed from cumbersome city rules governing personnel and purchasing. The authority will include 313-bed Denver Health Medical Center. It earned $5.6 million on patient revenues of $203 million in 1995, according to the Colorado Hospital Association.
The University of Illinois at Chicago Medical Center will merge its specialized eye and ear hospital with emergency and trauma services at its main hospital. The university said last week the move to end inpatient and emergency care at the Illinois Eye and Ear Infirmary is cost-effective and will save about $7 million in remodeling and upgrades. "The eye and ear infirmary has a number of fire code problems and doesn't even have a sprinkler system," said John Camper, associate chancellor for public affairs for the University of Illinois. "The average census is between five and eight patients a day." Outpatient visits will continue at the infirmary, which is across the street from the main UIC medical center campus. The decision comes about a month after UIC Medical Center said it would eliminate 180 full-time-equivalent employees (Sept. 2, p. 20).
Albuquerque, N.M.-based Horizon/CMS Healthcare Corp. said last week that a raid at one of its Michigan nursing homes by state law enforcement officials could result in civil or criminal fines or sanctions that "could have a material adverse impact on Horizon/CMS' financial condition and/or its results of operations." The healthcare fraud division of the Michigan attorney general's office served the Greenery at Howell nursing home in Howell, Mich., with search warrants earlier this month as part of an ongoing investigation of the facility, a state spokesman said. The spokesman declined to comment on why the facility is being targeted or on the materials seized by investigators. The Greenery at Howell nursing home is included in a breach of contract lawsuit filed in federal court by a physician group (June 17, p. 46).
NovaCare, a King of Prussia, Pa.-based rehabilitation services provider, agreed to buy nine outpatient providers in Arizona, California and Pennsylvania. Terms of the acquisitions weren't disclosed. The estimated combined annual revenues for all nine companies is $22 million. More than half that total is contributed by Certified Orthopedic Appliance Co. and Artificial Limb and Brace, which are based in Phoenix and operate nine orthotics and prosthetics centers in Arizona. NovaCare reported annual revenues of $800 million for its fiscal year ended June 30. It operates 500 orthotics, prosthetics and outpatient rehabilitation centers across the country.