The board of Norwood, Mass.-based Neponset Valley Health System voted late last week to merge with Boston-based Caritas Christi Health Care System, a little more than two weeks after entering negotiations (Nov. 10, p. 28). The only remaining regulatory hurdle is a Nov. 25 vote of the Massachusetts Public Health Council on transfer of Neponset's operating license. The Federal Trade Commission cleared the deal Nov. 19. Last month, Columbia/HCA Healthcare Corp. pulled out of an agreement to acquire Neponset.
Catholic Healthcare West, the San Francisco-based Roman Catholic system, said late last week that it will acquire Emergency Physicians Medical Group, which provides physician staffing to 28 hospital emergency departments in three states. Financial terms weren't disclosed. EPMG, also based in San Francisco, employs 80 full-time and 60 part-time physicians providing emergency staffing services at hospitals in California, Hawaii and Nevada. EPMG will operate as a for-profit subsidiary of CHW, which owns 37 hospitals in Arizona, California and Nevada.
Dallas-based Physicians Resource Group dismissed Chairman and Chief Executive Officer Emmett Moore late last week and said it will stop buying eye physician practices for the near future. It decided against a merger or sale. PRG's third-quarter earnings fell short of analysts' expectations. Net income for the quarter ended Sept. 30 fell 6% to $3.3 million, or 11 cents per share; revenues increased 68% to $101.7 million. PRG's stock has fallen to around $7 per share from a high of $35 in April 1996. In September PRG said it had hired Goldman, Sachs & Co. to explore ways to maximize shareholder value. PRG manages the practices of 439 physicians and 240 doctors of optometry.
The shareholders of Fort Smith, Ark.-based Beverly Enterprises late last week approved the company's plan to sell its institutional pharmacy unit to Baltimore-based Capstone Pharmacy Services for $795.3 million in stock and assumed debt. Capstone agreed to buy the unit in a stock transaction valued at about $520.3 million and to assume $275 million in Beverly debt. The acquisition is expected to be completed by Dec. 3. The new company will be called PharMerica and will be based in Tampa, Fla. Beverly shareholders will own 57% of the combined company, but it will be operated independently of Beverly. PharMerica will be one of the nation's largest institutional pharmacy companies with revenues of about $900 million and some 100 institutional pharmacies in 32 states.
A two-hospital health system in Cumberland, Md., late last week agreed to keep both hospitals open and commit to a definite plan detailing what services will be offered at each hospital. The commitment by Western Maryland Health System backpedals further from a previous inclination to consolidate acute-care services at one hospital and concentrate outpatient and specialty services at the other. Earlier this month, the system board said it would delay a closing until market forces and financial results dictated consolidation (Nov. 10, p. 24). But that plan, like the one before it, met with stiff community resistance.
Contractual relationships between hospices and nursing homes may encourage patient-care decisions to be based on financial rather than clinical factors, according to a report released late last week by HHS' inspector general's office. Such relationships may result in inappropriate referrals of nursing home patients to hospices in violation of the federal anti-kickback statutes, the agency said. The 16-page report is the latest from the inspector general questioning the business practices of post-acute-care and ancillary service providers (See related stories, p. 29).
As expected, President Clinton on Friday signed into law a Food and Drug Administration reform bill that passed both houses of Congress in voice votes early this month. The law streamlines device and drug approvals and renews user-fee payments by drug companies seeking approval of new drugs. In addition, the law allows the FDA to phase out hospital reporting directly to the agency about patient deaths and serious injuries involving medical devices.