The founders of InteCare, a company formed 18 months ago to help not-for-profit hospitals access capital markets by converting them to for-profit facilities, have pulled the plug on the company's operations, MODERN HEALTHCARE has learned. A spokesman for VHA, an Irving, Texas-based alliance of not-for-profit hospitals, confirmed InteCare's fate, blaming its demise on a lack of demand for its services. VHA had a 10% stake in the company (Nov. 6, 1995, p. 3). John Casey, a former president and chief operating officer of American Medical International, and three other investors owned 45% of the company, with the venture capital arm of Chemical Bank owning the remaining 45%.
Burbank, Calif.-based UniHealth is looking to divest its eight hospitals and possibly its physician practices, a source close to the company said late last week. UniHealth executives denied the source's claim. The source, who spoke on the condition of anonymity, said Catholic Healthcare West and Tenet Healthcare Corp. have sent "letters of interest" to UniHealth about acquiring the system's hospitals. UniHealth executives also have denied that the system is selling its HMO, CareAmerica. But sources said Blue Shield of California is poised to make an announcement about buying the 263,000-enrollee plan. Blue Shield has denied it is buying CareAmerica. Divesting its HMO, hospitals and physician practices would leave UniHealth a not-for-profit holding company.
Las Vegas-based Transitional Hospitals Corp. said late last week that the U.S. Justice Department has requested additional information regarding Louisville, Ky.-based Vencor's plans to purchase the company in a cash tender offer valued at $639 million. As a result of the antitrust investigation, Vencor is not permitted to proceed with the deal until the end of an extended review period. Vencor's offer is set to expire June 4. Vencor and Transitional are the largest operators of long-term acute-care hospitals. Vencor made a $16-per-share bid for Transitional after Mechanicsburg, Pa.-based Select Medical Corp. secured a deal to buy it for $14.55 per share. Anticipating an antitrust investigation, Transitional's board moved earlier in the week to not take a position on Vencor's offer (See story, p. 46).
La Porte (Ind.) Hospital late last week signed a letter of intent to affiliate with Indianapolis-based Clarian Health Partners. Clarian was formed last year through the merger of Methodist Hospital of Indiana, Indiana University Hospital and Riley Hospital for Children, all in Indianapolis. Clarian will name three of the 16 members of La Porte's parent board and advance up to $4 million to be matched by $1 million in local funds for service development at the 227-bed hospital. The affiliation deal takes effect Jan. 1, 1998.
Brown Memorial Hospital in Conneaut, Ohio, late last week completed an agreement to join Cleveland-based University Hospitals Health System. It's expected to take effect by late August. The parties signed a memorandum of understanding more than a year ago. UHHS will appoint three of Brown's nine board members, and 41-bed Brown Memorial will appoint one member to UHHS' board, a Brown spokeswoman said. No assets will be exchanged, she said.
About 57% of all hospitals are operating under a parent authority, including religious orders and government bodies, according to preliminary results of an American Hospital Association survey on hospital governance. The results were discussed late last week at the National Rural Health Association annual meeting in Seattle. Surprisingly, nearly 71% of local, not parent, boards remained the key voice in managed-care contracting decisions. But 58% of hospitals had ceded control over their assets to the parent board. The results cover 868 hospitals to date. Final results are due in late June.
Texas late last week became the first state to enact a law allowing HMO enrollees to sue their plans for malpractice. Gov. George Bush said he will let the measure take effect without his signature. It was passed easily by the Legislature earlier this month (May 19, p. 12). It goes into effect Sept. 1. There is a question of how many benefit plans will be affected by the new law, since federal law may exempt self-insured plans, said Jan Newsom, who represents the Texas Association of IPAs, which opposed the law. The Texas Medical Association supported it.