Richard Huber, 60, last Friday was named president and chief executive officer of Hartford, Conn.-based Aetna, succeeding Ronald E. Compton. Huber, who joined the company in 1995, was vice chairman of strategy and finance. A former investment banker, he helped orchestrate the sale of Aetna's $4.1 billion property-casualty business and its $8.9 billion merger with U.S. Healthcare. Huber became Compton's likely successor in May, when Joseph Sebastianelli resigned as Aetna president.
Entering the HMO market in the Northwest, Blue Bell, Pa.-based Aetna U.S. Healthcare late last week signed a definitive agreement to acquire Virginia Mason Health Plan, a 40,000-enrollee HMO in Seattle owned by Virginia Mason Medical Center. Aetna, which offers indemnity plans and a PPO in Washington, said the move will allow it to file for a Medicare risk product in the state. The deal is expected to close next month.
PHP Healthcare Corp. late last week said it will acquire the assets of HIP Health Plan of New Jersey's 18 healthcare centers and ancillary services for $73 million. Under a 20-year global capitation arrangement, Reston, Va.-based PHP will provide and manage healthcare services for HIP's 200,000 enrollees. The agreement with New Brunswick, N.J.-based HIP, a not-for-profit HMO, will more than double PHP's annual revenues, the company said.
Creditors of Qualis Care and its predecessor company, Towers Financial Corp., will receive $9 million in cash under a $14 million settlement related to an alleged fraud against investors. Under the agreement, approved by the U.S. Bankruptcy Court in New York last week, three law firms agreed to settle charges alleging they didn't perform an adequate background check on John Hall, the former chairman of Qualis Care, who pleaded guilty to criminal charges in the scam against investors.
n Daniel Crowley, 49, last week resigned ahead of schedule from the board of Foundation Health Systems, Woodland Hills, Calif. Crowley was formerly president, chairman and chief executive officer of Foundation Health Corp. before it merged with Health Systems International in April. He originally was scheduled to remain on the FHS board until March 31, 1998. In May he stepped aside as chairman of FHS, 11 months ahead of schedule, allowing Malik Hasan, M.D., to be named chairman and CEO. Crowley, who remains a consultant to FHS, is collecting on a three-year, $22 million severance and consulting contract.
Mallinckrodt last week reached a definitive agreement to purchase Nellcor Puritan Bennett for $28.50 per share in cash, or $1.9 billion. St. Louis-based Mallinckrodt makes various healthcare products, including X-ray contrast media, radiopharmaceuticals and disposable devices. Nellcor, based in Pleasanton, Calif., makes a wide range of critical-care equipment, including ventilators and patient monitors. The combined companies would have annual revenues of $2.4 billion.
Health Management Associates last week reported a 28% increase in net income for its third quarter ended June 30 to $31 million, or 28 cents per share, from $24.2 million, or 22 cents per share, in the year-ago quarter. The Naples, Fla.-based company said revenues grew 26% to $232.7 million.
Blue Cross and Blue Shield of Missouri has sued its former chief executive, alleging he wrongfully gave $1.6 million of Blues money to a real estate developer friend. The company sued Roy Heimburger in St. Louis Circuit Court. The lawsuit seeks $6.6 million in compensation for what it describes as Heimburger's breach of fiduciary duty and misrepresentation. The lawsuit charges that Heimburger gave the money to David Wilhelm, one of St. Louis' most prominent real estate developers. Court documents show that at Heimburger's insistence, Wilhelm was given a 49% interest in some warehouses purchased by the Blues in 1992. Then in 1993, Wilhelm's interest was bought out by the Blues for $1.6 million. His involvement in the questionable real estate deal reportedly prompted the Blues to demote and then fire Heimburger in March.