Detroit Medical Center said last week it will merge its Grace and Sinai hospitals in northwest Detroit. Over the next three years, operations will be consolidated at 530-bed Sinai, which DMC acquired earlier this year (Jan. 6, p. 13). The 402-bed Grace facility, about half a mile away, will be closed, and DMC will seek a purchaser for the property. DMC officials said the system will invest more than $135 million to renovate Sinai, including expanding emergency services and operating rooms and adding a multistory outpatient building. Officials anticipate a reduction of 350 positions from the combined work force of 4,800, virtually all through attrition.
Arizona has taken over financially troubled ComCare, a not-for-profit agency that administers mental health benefits for low-income residents of Maricopa County, which includes the Phoenix area. ComCare depleted its funding to treat non-Medicaid patients last April, more than two months before the end of its fiscal year. The state's takeover follows the resignation of ComCare's director and an audit of its books (July 14, p. 58). State officials said ComCare is in disarray and the agency wasn't cooperating with the state to draft a long-term plan for its fiscal health.
The proposed mergerlike partnership between Baptist Healthcare System of South Carolina and Richland Memorial Hospital, both in Columbia, S.C., cleared another hurdle last month when the Federal Trade Commission cleared the deal of antitrust problems. However, the agreement between the city's two largest acute-care facilities still faces a state legal battle. Several local residents have challenged the state's decision to grant the hospitals an antitrust exemption in exchange for certain regulatory restrictions on their business activities (July 7, p. 19). The South Carolina Supreme Court heard arguments in the case in June and is expected to render a decision by this fall.
Anthem Insurance Cos. has completed its $160 million acquisition of Acordia, merging the insurance brokerage and consulting firm into Anthem's wholly owned subsidiary, AICI Acquisition Corp. Indianapolis-based Anthem operates Blue Cross and Blue Shield plans in Indiana, Kentucky and Ohio. Anthem said it remains in discussions with an unidentified third-party financial buyer about a possible sale of the brokerage operations of Acordia.
A federal judge in Wilmington, Del., ordered CellPro to pay $7 million in damages to Johns Hopkins University, Baxter International and Becton Dickinson & Co. for willfully infringing their biotechnology patents. That's nearly three times the damages that a jury in the case earlier awarded the three plaintiffs (June 9, p. 52). Judge Roderick R. McKelvie also directed entry of an injunction against CellPro, Bothell, Wash. However, an injunction would not take effect until an alternative to CellPro's system for separating stem cells used in cancer treatment is approved by the Food and Drug Administration.
Kaiser Permanente has named an advisory panel to recommend improvements to its arbitration process. The move follows a June decision by the California Supreme Court, which said there's evidence that Kaiser may have engaged in fraudulent conduct in delaying an arbitration procedure (July 14, p. 40). The family of Wilfredo Engalla, a former Kaiser enrollee who died of lung cancer, sued Kaiser for alleged malpractice and for allegedly delaying arbitration until his death in order to reduce potential damages. A trial court will determine whether Kaiser delayed the arbitration for its own benefit. In naming the panel, David Lawrence, M.D., Kaiser chairman and chief executive officer, said, "When differences of opinion arise regarding care or service, these differences must be resolved in a sensitive and humane manner in a system that is fair to all parties involved." Chairing the panel will be Eugene F. Lynch, retired U.S. District Court Judge for the Northern District of California.