Fairview Health System of Minneapolis will get its $175 million tax-exempt bond issue after all, despite a union's interference. The eight-hospital Minnesota health system needs the money to pay off its $87.5 million acquisition of University of Minnesota Hospital and Clinic (March 17, p. 26). It also will use the funds for several capital projects. The American Federation of State, County and Municipal Employees, which opposed the university hospital deal, persuaded the Minneapolis City Council not to issue bonds for Fairview. But on April 8, the Minnesota Agricultural and Economic Development Board agreed to become the issuing authority instead.
SCAN Health Plan, a social HMO, has asked the California Department of Corporations to suspend its application to convert to for-profit status. It would be the first plan in the state to convert under a new law regulating that process. MODERN HEALTHCARE*disclosed SCAN's conversion plans last December (Dec. 9, 1996, p. 14). SCAN needs more time to respond to numerous requests by the department to clarify its application, said Stuart Byer, vice president of regulatory and public affairs. Among other things, the state is not satisfied that SCAN's plan will keep the for-profit company at arm's length from the foundation it is creating to satisfy state law, Byer said. The state also questions whether there is a market for a small social HMO and wants more specific details on the proposed conversion, he said. Meanwhile, Consumers Union, which is calling for public hearings on the conversion, has urged the state to question the independence of SCAN's foundation as well as other details of the transaction.
U.S. Diagnostic, the troubled West Palm Beach, Fla.-based diagnostic imaging chain, has rejected an unsolicited $212 million buyout bid from rival Medical Resources, Hackensack, N.J., citing its "highly conditional terms" and "irresponsibly low proposed purchase price." But U.S. Diagnostic, which has been rocked by continuing management turmoil, confirmed it has retained Smith Barney as financial adviser to consider strategic alternatives, including a possible sale (April 7, p. 40).
n*Kaiser Permanente has admitted that a state inspection of two of its California hospitals, which was conducted on behalf of HCFA in a probe of patient deaths, found the HMO didn't meet all HCFA's requirements. Kaiser said it was "taking immediate and decisive action to correct the deficiencies even before any conclusions are drawn" from the state health department's findings (April 7, p. 64). The HMO said the problems are unique to Kaiser Richmond (Calif.) Medical Center and Kaiser Oakland (Calif.) Medical Center. Kaiser explained that it underestimated the difficulty of keeping Kaiser Oakland running as a full-service hospital receiving transfers from the Richmond facility, which has a low patient census and only a standby emergency room. Kaiser is planning to close the Oakland facility. Among steps taken to resolve the problems, Kaiser has arranged for two community hospitals to receive critical-care patients from the Oakland and Richmond facilities.
McKesson Corp. has named Paul C. Julian president and chief operating officer of General Medical, a Richmond, Va.-based medical-surgical distributor that McKesson acquired in late February (March 3, p. 26). Before Julian's April 1 appointment, Steven Nielsen, General Medical's chairman and chief executive officer, also had served as president. Nielsen is staying with the company in those other capacities. Julian had been executive vice president of San Francisco-based McKesson's Health Systems since June 1996.
Baxter International's board of directors has elected Harry M. Jansen Kraemer Jr. president, effective immediately. Kraemer, 42, has been a senior vice president and chief financial officer at Baxter since 1993. He was promoted to Baxter's office of the chief executive in 1995. "Harry's promotion to president is another step to reinforce that the creation of shareholder value remains paramount in the operation of this company," said Vernon Loucks Jr., Baxter chairman and chief executive officer. Kraemer fills the slot left vacant when James Tobin left Baxter in 1994 for Biogen, a Cambridge, Mass.-based biotechnology concern.