At its meeting last week, the American Hospital Association board of trustees addressed for the first time the volatile issue of not-for-profit hospital conversions, but AHA executives declined to disclose what actions the board took. The board was supposed to consider a voluntary "code of conduct" for hospital executives involved in selling their facilities and a policy position against federal oversight of not-for-profit hospital conversions (March 31, p. 4). Chief AHA spokesman Richard Wade said the association's nine regional policy boards must review and approve the board's actions before making them public.
Wholesale prices for acute-care hospital services were unchanged in March and up 1.4% for the 12 months ended in March, according to the U.S. Labor Department's Producer Price Index released late last week. The PPI measures changes in net revenues per episode of care. Wholesale prices for physician services dropped 0.3% in March and were up just 1.0% for the 12 months ended in March.
The Federal Trade Commission late last week launched an antitrust investigation of Pennsauken, N.J.-based Mediq's proposed acquisition of Universal Hospital Services, Bloomington, Minn. Last week, Universal shareholders approved Mediq's $17.50-per-share cash buyout, but before the deal closed the FTC issued a so-called "second request" for information from the companies about the deal. Both companies rent durable medical equipment to hospitals and alternate-care facilities. The FTC's request is "voluminous" and will require considerable effort to answer, said Michael Sandler, senior vice president of finance at Mediq.
Joseph Littlejohn & Levy late Friday requested that its 9.6 million shares in Tenet Healthcare Corp. be registered with the Securities and Exchange Commission. The New York buyout firm had been the largest shareholder in OrNda HealthCorp, which Santa Barbara, Calif.-based Tenet acquired in January. Of the shares being registered, Tenet said JLL will immediately sell about 6.6 million, keep 1.8 million and sell the remainder in the future. That leaves Tenet with about 305 million outstanding shares. In addition, Tenet said JLL partners Paul Levy and Peter Joseph and Hyatt Corp. President Thomas Pritzker are leaving the board.
New York City Health and Hospitals Corp. late last week closed a $320 million letter-of-credit-backed bond deal. The tax-exempt variable-rate bonds represent the public hospital corporation's first foray into the bond market since 1993, when it issued $550 million of debt. Proceeds from the latest issuance will fund HHC's ongoing capital needs, including renovations and equipment purchases. Those funds also will help pay for the modernization of Elmhurst Hospital Center in Queens, a new ambulatory-care building at Harlem Hospital Center in Manhattan and construction of a long-term-care facility at Kings County Hospital Center in Brooklyn. Based on its current capital plan, the corporation expects to spend $380 million during the next four years. HHC posted a $143 million profit on total revenues of $4.5 billion in the fiscal year ended June 30.
The first and only president of New Jersey's only medical school and an influential figure in academic healthcare said he will retire effective June 30, 1998. Stanley S. Bergen Jr., M.D., who was named president of the University of Medicine and Dentistry of New Jersey some 25 years ago, revealed his retirement plans to the university's board of trustees late last week. Bergen, 67, said he'll spend the next year repositioning the academic health center's managed-care units, solidifying hospital and physician relationships and creating a "health authority" to oversee UMDNJ's educational programs and health delivery system.
John Grotting, a key Allina Health System executive, resigned effective May 1 to become president of a San Diego-based biomedical technology company, Bridge Medical. Grotting, 48, was named Young Healthcare Executive of the Year by the American College of Healthcare Executives in 1989. At Minneapolis-based Allina, he was system vice president of care delivery operations.