Both 822-bed Community Hospitals of Indianapolis and 836-bed St. Vincent Hospital and Health Care Center, also of Indianapolis, have announced job eliminations nearly a year after the high-profile breakup of their joint operating agreement. The JOA was one of the first to receive approval from the Internal Revenue Service. Community said it intends to eliminate 100 full-time positions by early next year through attrition. Some of the system's 5,300 full- and part-time workers could face lower wages, hospital officials said. St. Vincent said it plans to eliminate 135 of its 5,200 full-time positions but couldn't guarantee employees wouldn't be laid off. St. Vincent is currently negotiating an affiliation or merger with 428-bed St. Francis Hospital and Health Centers in suburban Beech Grove, Ind.
Wholesale prices for acute-care hospital services rose 0.1% in November, down from October's hike of 0.4%, according to the U.S. Labor Department's Producer Price Index released last week. For the 12-month period ended in November, prices for hospital care were up 1.4%. The PPI measures changes in net revenues per episode of care. Prices for physician services, meanwhile, were unchanged in November, following October's 0.4% increase. For the 12-month period ended in November, physician prices were up just 0.7%.
Trigon Blue Cross and Blue Shield said it is selling an electronic-claims subsidiary, Health Communications Services, to Atlanta-based National Data Corp. Terms were not disclosed. Richmond, Va.-based Trigon, which is in the final regulatory stages of converting to a for-profit company, said it wants to concentrate on its core competencies of managed care and insurance. HCS, formed in 1986, provides electronic-claims processing for physicians and hospitals in 22 states, the District of Columbia and the United Kingdom.
HBO & Co., an Atlanta-based healthcare information systems and services company, last week announced it had completed the acquisition of GMIS, a Malvern, Pa.-based developer of software for managed-care companies and other healthcare payers, in exchange for about 3.7 million shares of HBO & Co. stock valued at $204 million. GMIS shareholders received 0.42 of a share for each of 8.8 million GMIS shares outstanding. On Dec. 10, shares of HBO & Co. closed at $55.25 in NASDAQ trading. The deal was announced in September.
The Blue Cross and Blue Shield Association has struck a purchasing alliance with Healthcare Purchasing Partners, a division of VHA, effective Jan. 2. Under the first phase of the two-year agreement, the Blues will get discounts on food service, paper supplies, furniture and moving services. Starting in mid-1997, the agreement will be extended to capital equipment, medical surgical supplies, software and travel. A VHA spokesman said expected purchasing volume is unknown because the Blues has not formally tracked its volume in the past. In total, Healthcare Purchasing Partners accounts for $750 million in annual group purchases, according to VHA. The Blues estimates savings to members of about $3 million during the first year.
Res-Care, a Louisville, Ky.-based provider of services for people with developmental disabilities, said it has agreed to buy Premier Rehabilitation Centers for $6.5 million in stock. The agreement calls for Res-Care to exchange 409,000 shares of its common stock in a pooling of interests. In NASDAQ trading last week, the company's stock closed at between $15 and $16 per share. The deal is expected to close on Jan. 3. Premier is a privately owned provider of services for patients with neurological disorders. It expects $6.5 million in revenues this year and owns three facilities in Chicago, St. Louis and Miami. Res-Care said the acquisition should complement its services for the disabled and increase its reach into private-payer sources, which are Premier's primary reimbursement source. Res-Care, with $171.7 million in 1995 revenues, will now operate 300 facilities and programs in 16 states through its Division for Persons with Disabilities.