Kenosha (Wis.) Hospital and Medical Center has signed a letter of intent to explore an alliance with Milwaukee-based Aurora Health Care. The announcement follows the highly publicized breakdown in June of talks about a mergerlike partnership between 115-bed Kenosha Hospital and 170-bed St. Catherine's Hospital, the only other hospital in Kenosha (July 7, p. 22). While the particulars of an alliance with Aurora weren't made public, the relationship won't be an affiliation or merger, said Diane De La Santos, an Aurora spokeswoman. Aurora is a not-for-profit integrated delivery system, which has a dozen hospitals and 125 clinics and ambulatory-care centers, as well as home health, pharmacy and social service agencies. Since breaking off talks with Kenosha Hospital, St. Catherine's has been talking with Wheaton (Ill.) Franciscan Services about a possible sale.
The trial of two Kansas doctors indicted in a major Medicare kickback case has been scheduled to begin April 14, 1998. Brothers Robert C. LaHue, D.O., and Ronald H. LaHue, D.O., were principals in the now defunct Blue Valley Medical Group. In July, they pleaded not guilty to 63 counts of submitting false claims to Medicare, money laundering and other crimes. They will be tried together in U.S. District Court in Kansas City, Kan. A spokeswoman for U.S. Attorney Jackie N. Williams said the investigation of Medicare fraud in Kansas and Missouri is continuing but declined to comment further. The indictments against the physicians alleged they conspired with five area hospitals to refer patients to those facilities in exchange for kickbacks disguised as consulting fees (June 23, p. 2). None of the hospitals or their executives has been indicted, but one facility has settled civil charges stemming from its involvement in the scheme.
The Federal Trade Commission has cleared Yale New Haven (Conn.) Health System's mergerlike affiliation with Greenwich (Conn.) Hospital. Under terms of the deal, Yale New Haven will assume control of 160-bed Greenwich Hospital's operations (June 9, p. 24). Greenwich retains separate ownership and governance. Pending state certificate-of-need and attorney general approvals, the deal is expected to be completed by year-end.
The Department of Veterans Affairs has appointed Kenneth Clark to the post of chief network officer in charge of coordinating the 22 veterans' healthcare networks nationwide. Formerly director of the VA's Los Angeles medical center, Clark now will serve as the contact between VA headquarters staff and field officials and will monitor and evaluate the performance of network directors. Clark, who has been with the VA since 1974, previously was director of the healthcare system's western region. He replaces Jule Moravec as chief network officer. Moravec left the post in April.
The settlement of a variety of legal disputes thwarted what would have been a boom quarter for U.S. Diagnostic. For the second quarter ended June 30, the West Palm Beach, Fla.-based outpatient diagnostic imaging chain lost $11.9 million on record revenues of $57.5 million. The company said results for the quarter were depressed by a $4.9 million settlement of shareholder lawsuits, a $2.8 million settlement as part of the termination of a former chairman and chief executive officer, $3.7 million in professional fees related to the lawsuits and regulators' investigations, and a $3.7 million write-off of impaired assets (April 7, p. 40). "These one-time charges signal the end of a difficult but successful transitional period for the company," said Joseph A. Paul, president and chief executive officer, in a statement.
The Federal Trade Commission has cleared two transactions involving not-for-profit health plans in the Northwest. The FTC approved Aetna U.S. Healthcare's acquisition of Virginia Mason Health Plan, a 40,000-enrollee HMO in Washington state owned and operated by Seattle's Virginia Mason Medical Center. Terms of the deal weren't disclosed. The FTC also cleared Foundation Health Systems' acquisition of PACC Health Plans, a 116,000-enrollee plan based in Clackamas, Ore., that includes an HMO and a PPO. The purchase price will be used to endow a charitable foundation established by PACC. The Aetna-Virginia Mason deal was announced last month, and the FHS-PACC deal was announced in April. Both transactions are expected to close shortly.