HealthSouth Corp. and Oxford Health Plans rang in the New Year with bubbly share prices after Standard & Poor's Corp. said the companies would become members of two key stock market indexes.
Birmingham, Ala.-based HealthSouth's share price rose 8% on the New York Stock Exchange on Jan. 3 in trading volume quadruple that of the previous day. On Jan. 2, the first trading day of 1997, Standard & Poor's said HealthSouth would replace Boatmen's Bancshares in the S&P 500 index, a benchmark for blue-chip corporations.
On Wall Street, joining the S&P 500 is the financial world's equivalent of moving up to baseball's major leagues.
"There's always a degree of prestige for the management of a company to say they're part of the S&P 500," said Perrin H. Long Jr., an independent securities analyst in Darien, Conn.
Share prices and trading volume in newly named companies often jump as mutual fund managers rush to buy shares. Those quick gains often stick. "Longer-term, there is a benefit in the total valuation of the common shares," Long said. "It's hell to quantify but it can't hurt."
Meanwhile, Oxford Health Plans will take HealthSouth's spot on the S&P MidCap 400, a closely watched index of up-and-coming companies that's a proving ground for the S&P 500. Norwalk, Conn.-based Oxford's share price increased 5% on the NASDAQ system on Jan. 3. Trading volume rose 7% over the previous session.
Morris' laments.It appears you can take Stephen M. Morris out of Samaritan Health System but you can't take the system out of him.
Morris, who left the Phoenix-based system in 1984, is now a healthcare consultant in the area. With Samaritan embarked on an alliance with San Francisco-based Catholic Healthcare West, Morris said he felt constrained to comment on the deal.
Writing a commentary in the Arizona Republic last month, Morris decried the arrangement as a loss of local control. A merger "can ultimately cost Arizona hundreds of millions of dollars in charitable contributions for healthcare facilities, equipment and patient care," he said. CHW has made no commitment to keeping not-for-profit Samaritan's assets in the community if it is sold at a later date, he noted.
It isn't the first time Morris has had something to say about his former employer. When he left what was known then as SamCor, Morris called it a retirement. But many say he was forced out after some Samaritan trustees disagreed about his maneuvering to align with or sell to Hospital Corporation of America, which happened to be an out-of-state operator.
Morris confirmed that he had a "divided board of directors" at the time of his departure, but said he wasn't forced out.
In August 1984 Morris sued former Samaritan board Vice Chairman Ron Warner for criticizing him in the media about allegedly going behind the board's back. He sought $10 million in general and punitive damages, but lost at the appellate court level.
Up and out.Gary M. Sudhalter has gone from healthcare up and comer to jumping through hoops for a big-time sports agent.
Sudhalter made MODERN HEALTHCARE's 1996 list of executives under 40 who are seen as potential industry leaders. He was given this recognition last year when he was the director of marketing and promotions for Calverton, Md.-based Allegis Health Services, an $80 million long-term-care company. When Allegis was acquired by New London, Conn.-based Mariner Health Group in late 1996, he became a regional vice president for marketing.
But last week, Sudhalter, 33, traded HCFA and HHS for the NBA and the NFL and started his new job as director of sales and marketing for Falk Associates Management Enterprises, a Washington-based sports management company that represents the likes of Michael Jordan and Patrick Ewing.
Sudhalter said his main responsibility will be to match athletes with endorsement opportunities. He added that the job is a chance to marry his love of sports with his skills as a marketer. "This fell into the dream category," he said.
At the same time, he said he plans to keep his nursing home administrators' license updated through courses. He also plans to tap into his healthcare experience, noting that health-conscious athletes and those who have undergone rehabilitation could easily tie into advertising healthcare products and companies.
Sudhalter said when he became an up and comer that "my philosophy is that change is good." Clearly, he practices what he preaches.
From mistake to worthy cause.A new foundation started with proceeds of a settlement by a Blues plan in an overcharging case will help with the healthcare needs of victims of domestic violence in New Mexico.
The Santa Fe (N.M.) Community Foundation is creating an endowment called Statewide Funds for Healthy Families to generate income in perpetuity, said Ruth Ortega, executive director of the foundation.
The foundation will start with $50,000 from Blue Cross and Blue Shield of New Mexico, part of a recent settlement between the Blues and the state insurance department after a department investigation found the Blues overcharged some subscribers through faulty billing procedures.
The settlement with the state also requires the Blues to pay a fine of $110,000, cover the $40,000 cost of the insurance department's investigation and hand out more than $660,000 in refunds to subscribers.
Quotable."If you are talking about an AHA-type commission that would be delegating (authority outside of Congress), the chances of that aren't very high."-A GOP congressional aide, commenting on the fate of an American Hospital Association lobbying effort for a permanent commission to govern Medicare.