DE WITT, Iowa-DeWitt Community Hospital merged with Genesis Health System, Davenport, Iowa, earlier this spring after several years of affiliation with its flagship hospital. DeWitt, a 101-bed hospital, lost about $30,000 on net revenues of $5.6 million in 1996. Without the backing of a larger system, the hospital wouldn't win critical managed-care contracts and wouldn't be able to afford certain steps toward greater efficiency, said Jim Christensen, its president. The year-old Genesis system includes 468-bed Genesis Medical Center in Davenport and 133-bed Illini Hospital in nearby Silvis, Ill. Excluding DeWitt, Genesis expects to earn $9.6 million on net revenues of $248 million in the year ending June 30. The DeWitt board will name one member to the 13-member Genesis board. Its local board, however, will get the final say on the provision of services at the DeWitt facility.
CHICAGO-Two prestigious Chicago institutions are forming a limited liability corporation to integrate and expand their rehabilitation offerings to the western metropolitan region. They are 176-bed Rehabilitation Institute of Chicago and 809-bed Loyola University Health System, Maywood, Ill., which operates two hospitals. As part of the deal, the institute will create a unit at its Chicago facility for Loyola patients only. It will be staffed by Loyola clinicians and case managers to assure continuity of care. Meanwhile, an institute unit will begin operations at Loyola. Over time, the new company plans significant investments in outpatient facilities, said Joanne Smith, M.D., the institute's director of medical planning. Initially, the company will have a capital budget of $3 million funded 50-50 by the partners. Recently, the institute also crafted a partnership agreement with Southern Illinois Healthcare, Carbondale, to work cooperatively in southern Illinois. A new $1.5 million, 19-bed rehabilitation unit will begin operation at one of the system's six hospitals by midsummer.
ST. LOUIS-RightChoice Managed Care, the troubled for-profit subsidiary of Blue Cross and Blue Shield of Missouri, reported a 24% decline in net income to $6.2 million, or 33 cents per share, for the first quarter ended March 31, compared with net income of $8.2 million, or 44 cents per share, in the year-ago quarter. Without a tenfold increase in net realized gains on investments, to $10.2 million, the health insurer would have lost money in the quarter. On operations it lost $2.1 million in the quarter, compared with earnings of $10.4 million a year ago. Revenues rose 12% to $176.3 million. Operating expenses increased to $178.5 million from $147.6 million a year earlier, propelled by higher utilization and cost trends. John A. O'Rourke, the newly named chief executive officer of RightChoice, announced a series of measures to boost enrollment and rein in expenses. RightChoice and its parent Blues plan had been embroiled in a long-running legal dispute with the Missouri insurance department that culminated in the firing of O'Rourke's predecessor, Roy Heimburger.