Columbia completes Value Health deal. Despite several strategy changes implemented by its new leadership, Columbia/HCA Healthcare Corp. decided to complete its $1.1 billion acquisition of Value Health. Columbia last week purchased the Avon, Conn.-based benefits manager after the California Department of Corporations approved the deal. The state's approval was needed because a Value Health subsidiary is based in California. Some Wall Street analysts were surprised Columbia went through with the deal because Value Health has shown stagnant revenues and declining profit margins despite business diversification efforts (March 3, p. 38). Under previously announced terms, Columbia paid $20.50 for each Value Health share.
Oxford makes Sullivan CEO. Norwalk, Conn.-based Oxford Health Plans appointed its former president, William Sullivan, its chief executive officer. He succeeds Stephen Wiggins, Oxford's founder, who will continue as chairman of the company. Wiggins said he will "stay actively involved in strategic planning and growth opportunities" for Oxford, focusing on its specialty management subsidiary. Sullivan has taken over much of the CEO role in the past year. In trading Aug. 7, Oxford's stock tumbled 6.6% to $74 per share following news of the executive shuffle. It recently reported a 66% rise in second-quarter net income to $37.2 million, or 45 cents per share, from $22.5 million, or 28 cents per share, in the year-ago quarter. Revenues for the second quarter ended June 30 rose 46% to $1 billion.
12 indicted in Fla. home-care probe. A federal grand jury returned a 102-count indictment charging 12 people in Florida with defrauding Medicare of $15 million in what the government calls the nation's largest-ever home-care fraud scam. The grand jury indicted two administrators of Coral Gables, Fla.-based Mederi of Dade County, five physicians, a physical therapist, two owners of home-care nursing groups and two home-care aides; all were affiliated with the Mederi home-care agency. The indictment follows a 41/2-year probe by the U.S. attorney's office in Miami, the FBI and the Internal Revenue Service. It contends administrators set up a network of false nursing groups and used them to submit fraudulent Medicare billings.
Woman to battle hospital on the Internet. A woman fighting to get a hospital to release information about infection rates will take her case from the courtroom to the Internet. Calling her appeal to the U.S. Supreme Court a "long shot," Karen Burton told the Associated Press she will research and inform people via the Internet. "I decided I was going to invest my energies into attempting to dig out all the information that I can on infections at (University of Iowa Hospital and Clinics)," Burton said. An Iowa Supreme Court ruling filed June 18 said the state-owned university hospital system in Iowa City isn't required to release its nosocomial infection rates publicly (June 23, p. 22). Nosocomial infections are acquired during patients' hospital stays, indicating the bacteria is present in the facility. Hospitals routinely track such infections in an effort to prevent them later.
Calif. Democrats protest delay on managed-care bills. California Gov. Pete Wilson's vow to veto "literally dozens" of managed-care bills passed by the state Legislature this year caused a storm of protest from Democratic legislators. Wilson said he wants to await the January recommendations of a task force charged with a broad examination of managed-care issues (See related story, p. 70). Democratic lawmakers said they are furious that after months of committee deliberations on their bills, many of which passed with bipartisan support, they now must await action by what they call an industry-dominated task force. Wilson already has vetoed a bill to allow female HMO patients to make appointments directly with a gynecologist without first seeing an HMO gatekeeper. The governor's ultimatum leaves the authors of the healthcare bills in the position of either withholding their bills until after the first of the year-meaning they would not take effect for another year without a two-thirds vote of the Legislature-or sending them to the governor for his promised veto.