Litchfield (Conn.) Superior Court has appointed a receiver to supervise Winsted (Conn.) Memorial Hospital's day-to-day operations. Winsted's board of directors agreed to place the hospital under a court-appointed administrator "after lengthy negotiations" with the state attorney general's office, said Herbert G. Isaacson, board chairman. James E. Sok, the hospital's chief executive, agreed to resign. Last month, the state filed suit to bar Winsted from closing inpatient services without court approval. Under an agreement reached earlier this month, the receiver will conduct a financial and managerial audit of Winsted and submit recommendations to the court regarding which services, if any, can be delivered at the hospital, given its precarious financial condition. In addition, three community members will be added to the hospital's board.
Nashville, Tenn.-based Principal Hospital Co. completed its acquisition of the 35-bed Starke Memorial Hospital in Knox, Ind. The deal calls for a 20-year lease agreement with options for two 10-year renewals. Principal, a privately held investor-owned firm, paid $10.1 million upfront and about $75,000 annually to use the hospital (Aug. 26, p. 38). It is the second acquisition for Principal, which was formed in February through a partnership with Chicago-based venture capital firm Golder, Thoma, Cressey, Rauner. In addition, Principal said it will establish an affiliation with a larger not-for-profit hospital, Memorial Health Systems in South Bend, Ind. Memorial's preferred provider network covers more than 300,000 people in northern Indiana.
WellPoint Health Networks said it has signed a definitive agreement to buy the group health and life benefits business of John Hancock Mutual Life Insurance Co. for $86.7 million. The Hancock operations mainly provide administrative services to companies that pay their own healthcare bills. The acquisition will bring 1.4 million new enrollees to Woodland Hills, Calif.-based WellPoint, raising total enrollment in the managed-care company to 5.5 million.
*A 64-year-old man who lapsed into a coma after he was given the wrong medication died last week at University Community Hospital in Tampa, Fla. Officials did not release Jack Cecil's cause of death. He went to the UCH emergency room Aug. 10 complaining of breathing problems. A physician assistant who was licensed to prescribe drugs directed a nurse to give Toradol, an analgesic similar to aspirin. But Cecil's chart noted he was allergic to aspirin. He had a heart attack and went into a coma. Hospital officials suspended the nurse and the physician assistant in September. UCH also filed the required paperwork with the state Agency for Health Care Administration, which will determine where fault lies. Cecil's death is the latest of several highly publicized incidents at UCH since 1995.
*American HomePatient, a home-care provider based in Brentwood, Tenn., announced the acquisition of three home medical equipment and infusion companies for an undisclosed amount. American HomePatient purchased Baker Health Care Specialists in Jonesboro, Ark., OptionCare in Whiteville, N.C., and I.V. Support in San Angelo, Texas. The newly acquired companies have combined annual revenues of $4 million. The purchases continue American HomePatient's buying spree, bringing their 1996 acquisition total to 31 home-care companies, which represent 82 centers and $83 million in annual revenues. The company operates nearly 300 home-care centers in 32 states and reported 1995 revenues of $162.4 million.
*VHA and Advance Paradigm, a pharmacy-benefit management firm, are creating a program for HMOs owned by or affiliated with members of the hospital alliance. Both companies are based in Irving, Texas. About 100 VHA members hold ownership positions in HMOs with more than 3.8 million enrollees. About 20 other VHA members are developing such interests. The new program will have more straightforward pricing than is common in the industry, said Jeff Hayes, vice president of service development at VHA. Many pharmacy-benefit managers use confusing pricing, he said. Healthcare employer groups are another target market for the program. VHA members cover about 2 million people under their pharmacy benefit plans.