The Delaware Chancery Court late last week issued a preliminary injunction to stop the pending $1.8 billion merger of Atlanta-based GranCare and Houston-based Living Centers of America. The injunction was sought by Gaithersburg, Md.-based Manor Care and its Vitalink Pharmacy Services of Naperville, Ill., to enforce a noncompetition agreement that Manor Care signed with GranCare in February. The complaint said GranCare is prohibited from directly or indirectly owning, joining with or participating in a company in the institutional pharmacy business for three years. GranCare sold its institutional pharmacy business to Vitalink in February, but Living Centers operates American Pharmaceutical Services of Naperville, which serves 100,000 nursing home beds. GranCare said it is committed to completing the transaction according to existing merger agreements.
Acting Massachusetts Gov. Paul Cellucci last week proposed an expansion of the state's Medicaid program to cover all children through age 18 living at or below 200% of the federal poverty level. If enacted, the proposed legislation would be the third incremental improvement in coverage for an estimated 160,000 uninsured children since the state received a waiver from federal Medicaid regulations in 1995. Legislation passed last year extended Medicaid coverage to families earning up to 133% of the poverty level, including an estimated 57,000 children. And supplemental budget legislation this year covers children through age 12 in families earning up to 200% of the poverty level. Total cost of the proposed children's healthcare expansion is $45 million a year, and it would cover an additional 32,000 children, according to the governor's office.
New Jersey Gov. Christine Todd Whitman last week signed into law a bill containing numerous protections for enrollees in managed-care plans. The measure covers HMOs, PPOs and managed-care plans sponsored by insurance companies. Among other things, the legislation bans "gag rules" that prevent doctors from speaking freely to patients about their treatment options, requires a plan's medical director to be a licensed physician and gives consumers the right to appeal a plan's decision to deny or limit medically necessary care. The measure's chief sponsor, Sen. Jack Sinagra (R-Middlesex), is chairman of the state Senate Health Committee.
Premier health alliance last week urged President Clinton to intervene in the Teamsters strike against the United Parcel Service for the sake of public safety (See story, p. 17). James Scott, president of the Premier Institute, the alliance's lobbying branch, expressed the alliance's concerns in a letter to the president. He said UPS has agreed to continue emergency shipments of blood plasma to its members, but "obviously we are very concerned about the level of service they will be able to supply." In the letter, Scott said many of its rural hospital members receive all their medical supplies through UPS. Premier represents more than 240 hospitals and hospital systems.
Lutheran Medical Center and Maimonides Medical Center, both in Brooklyn, N.Y., signed a memorandum of understanding to form an integrated delivery system. The two hospitals combined have about 1,160 beds and $678 million in revenues. According to the memorandum, they will be equal partners in a new system combining their satellites, physicians and other affiliates. Both hospitals also are members of New York's Mount Sinai Health System. It has not been decided whether they will pursue a full asset merger or another structure, a Maimonides spokeswoman said. The new system is expected to be in operation by early 1998.
Finley Hospital of Dubuque, Iowa, completed its agreement to merge with Des Moines-based Iowa Health System. With 158-bed Finley, seven-hospital Iowa Health System has more than $900 million in combined assets. Annual net patient revenues from its member facilities were nearly $700 million in 1996. The Federal Trade Commission cleared the deal last month (July 28, p. 20). Finley began discussing a merger with Iowa Health System in January, one week after it called off its proposed mergerlike partnership with Dubuque's only other hospital, 415-bed Mercy Health Center. The U.S. Justice Department's antitrust challenge of the Finley-Mercy deal had been pending in a federal appeals court.