New York's Beth Israel Medical Center and St. Luke's-Roosevelt Hospital Center are expected to announce consolidation plans this week. According to sources who asked not to be identified, the two medical centers are nearing a deal. Although neither institution's spokespeople would confirm it, the imminent memorandum of understanding would authorize the creation of a single parent company. Apparently, St. Luke's-Roosevelt is considered to be more geographically compatible than Beth Israel's previous partner, New Hyde Park, N.Y.-based Long Island Jewish Medical Center. The Beth Israel-Long Island Jewish partnership was supposed to culminate in the creation of a joint parent company governed by a board with equal membership and managed jointly by the two chief executives through an "office of the president." But in a statement issued last month, the hospitals said they've decided to maintain "separate corporate structures."
Louisiana Health System and Our Lady of Lourdes Regional Medical Center, both in Lafayette, La., have dropped their merger talks. The two hospitals had announced a memorandum of intent on Sept. 20 to "explore and evaluate the possibility of a closer affiliation between our organizations." In a joint statement dated Nov. 25, the hospitals said that "merger is not an option now, but we continue to engage in cooperative efforts." They hope to realize some of the benefits of consolidation without merging. Louisiana Health System is the parent organization of Lafayette General Medical Center.
Millions of customers of Pennsylvania Blue Shield and Blue Cross of Western Pennsylvania will soon be served by a newly merged company, now that the state insurance commissioner has given regulatory approval for six subsidiaries of the companies. The move paves the way for the creation of the nation's eighth-largest Blue Cross and Blue Shield insurer, which will be called Highmark Blue Cross and Blue Shield, said Commissioner Linda Kaiser. Highmark will be the third-largest Blues in the country, said Douglas Smith, company vice president of corporate affairs. The Blue Cross and Blue Shield officials expect to complete the transaction by the end of the year.
Cardinal Health said it will acquire Owen Healthcare in a stock swap valued at $496 million. Cardinal is a healthcare service and product distributor based in Dublin, Ohio. Houston-based Owen Healthcare is the second-largest pharmacy management service company in the country. Earlier this year, Cardinal acquired Pyxis Corp. for $952 million. In July, Cardinal announced it would buy drug packager PCI Services in a $253 million deal. The acquisition value is based on a price of $27.25 per share of Owen stock. On Nov. 27, the day the deal was announced, Cardinal shares fell $2 to close at $84.50 and Owen Healthcare shares surged $8.75 to $25.50 in New York Stock Exchange trading.
A part-time surveyor for the Joint Commission on Accreditation of Healthcare Organizations was killed in the Nov. 19 crash of a commuter flight in Quincy, Ill., the JCAHO said last week. Deborah Heffelbower, 44, a nurse, was an intermittent surveyor in home healthcare accreditation surveys. She formerly worked at Burlington (Iowa) Medical Center. She was traveling from her home in Burlington to the Joint Commission's Oakbrook Terrace, Ill., headquarters for training when the United Express airplane she was flying in collided with a small private plane as it was landing. All passengers and crew on both planes were killed.
Suffering continued enrollment declines and financial deterioration, the Health Insurance Plan of Greater New York has endured another indignity-a downgrade of its bond rating to BBB- from BBB by Standard & Poor's Corp. It's the second downgrade of the HMO's debt in two months. If things don't turn around, Standard & Poor's said, HIP's rating could be lowered into the speculative-grade category in one to three years. The downgrade, which affects $124.4 million of debt, is based on the utilization and financial performance of HIP's plans in Florida, New Jersey and New York.