For-profits lose support-survey. Public confidence in for-profit hospitals dipped significantly in the past five months, corresponding to the escalation of Columbia/HCA Healthcare Corp.'s legal woes, according to the not-for-profit Kaiser Family Foundation. A March survey compared perceptions of for-profit and not-for-profit hospitals, and a follow-up survey was released last week. The percentage of respondents believing for-profit hospitals provide better care dropped to 42% from 55% in the March survey. Meanwhile, the percentage of respondents identifying investor-owned facilities as more efficient fell to 48% from 57%.
Quorum's profits rise. Quorum Health Group last week reported net income of $84.1 million, or $1.66 per share, for the year ended June 30, up 21% from net income of $69.2 million, or $1.39 per share, in the previous year. Net operating revenues rose 29% to $1.4 billion. Earnings are stated before an extraordinary charge of $8.2 million for retiring debt. Brentwood, Tenn.-based Quorum also announced a three-for-two stock split to take place on or about Sept. 16.
IHS to buy Coram unit. Integrated Health Services last week signed an agreement to buy the lithotripsy unit of Coram Healthcare for $130 million in cash. Four months ago, Owings Mills, Md.-based IHS terminated a planned merger with Denver-based Coram and agreed to pay the company $21 million. The lithotripsy business includes 33 mobile machines operating in 18 states. The acquisition is expected to close within 60 days.
SmithKline faces suit. A consortium of 37 private health insurance companies last week sued SmithKline Beecham, a Philadelphia-based pharmaceutical company, alleging the firm overbilled them for clinical laboratory testing services. The suit, filed in U.S. District Court in Hartford, Conn., follows a February agreement in which SmithKline paid the federal government $325 million to settle allegations that it overbilled Medicare and Medicaid for lab services. The company denied the allegations and said it will fight the suit.
Owens & Minor, VHA sign med-surg deal. Owens & Minor signed a three-year medical-surgical supply distribution contract last week with VHA, an Irving, Texas-based hospital alliance. The agreement extends Owens' 12-year relationship with VHA, which accounts for $1.2 billion in annual sales. The Richmond, Va.-based company said the agreement reinforces its position as the largest authorized distribution agent for VHA facilities.
Billing companies targeted. A top federal fraud fighter last week said investigators are focusing on billing companies and their clients and warned hospitals to scrutinize a potential billing company closely lest it lead the hospital into trouble. "Our experience is that there is a proliferation of billing companies," said Lewis Morris, HHS assistant inspector general for legal affairs. Some companies "are seeking to inappropriately maximize reimbursements," Morris said. At least one billing company has already settled fraud charges (June 30, p. 49). Morris said executives from that company were cooperating with a law enforcement review of the company's hospital clients. "We're going after hospitals for upcoding, and additional hospitals are being investigated," Morris said. He added there are an unspecified number of additional billing companies being investigated.
N.D. hospital to close. Bismarck, N.D.-based Medcenter One will close its 52-bed acute-care hospital, called Medcenter One Mandan, in Mandan, N.D. The emergency room will be closed around Oct. 1; laboratory, X-ray and outpatient services will remain in the building. Dallas-based Spectrum Comprehensive Care will open a 29-bed long-term acute-care hospital in space leased from the healthcare system. Spectrum said it will spend about $325,000 on renovations. The facility is scheduled to open in November. Spectrum's patients typically have multiple medical conditions or complications, requiring hospitalizations averaging more than 35 days.