New York Hospital and Presbyterian Hospital have completed their full-asset merger, which was announced in July 1996 (July 29, 1996, p. 6). The new organization, New York and Presbyterian Hospital, is the city's largest medical center, with 2,170 beds, 12,400 employees and projected 1998 revenues of $1.5 billion. The merger partners also oversee a regional network of 29 hospitals. Officials said the merged hospital will retain academic affiliations with Cornell University Medical College and Columbia University's College of Physicians and Surgeons.
A regional director of the National Labor Relations Board earlier this month dismissed a petition by a union seeking to represent about 400 independent physicians in southern New Jersey. The union, Local 56 of the United Food and Commercial Workers, is trying to break new ground in representing independent physicians, and its success could clear the way for unions elsewhere. It filed its petition to represent the doctors last October (Nov. 3, 1997, p. 33). Local 56 said it will appeal.
Catholic Health East is a done deal. The 33-hospital system was formed by Tampa, Fla.-based Allegany Health System; Radnor, Pa.-based Eastern Mercy Health System; and Holyoke, Mass.-based Sisters of Providence Health System. The systems announced their plans to consolidate last May (June 2, 1997, p. 8). The new powerhouse system, based in Radnor, will have facilities in 10 states on the East Coast, annual revenues of $2.8 billion and assets of $3.5 billion.
Helene Fuld Medical Center and Mercer Medical Center, both of Trenton, N.J., have completed their merger, creating a 549-bed not-for-profit with $200 million in revenues called Capital Health System (Nov. 11, 1997, p. 20). Both facilities will operate under the names Capital Health System at Mercer and Capital Health System at Fuld. With 3,000 full-time employees, the system is the largest private employer in New Jersey's Mercer County.
HBO & Co., an Atlanta-based healthcare software and services company, completed the acquisition of National Health Enhancement Systems, a Phoenix-based provider of medical call centers that manage healthcare needs of defined populations. The stock deal, valued at about $83 million, was announced last October (Oct. 6, 1997, p. 4).
Standard & Poor's lowered Integrated Health Services' corporate-credit and bank-loan ratings to B+ from BB- after the close of IHS' acquisition of long-term-care centers from HealthSouth Corp. earlier this month. IHS' subordinated debt ratings fell to B- from B. The Owings Mills, Md.-based company acquired HealthSouth's facilities for $1.2 billion in cash and the assumption of $100 million in debt. The deal was first announced last November (Nov. 10, 1997, p. 49). IHS' total debt now stands at about $3.3 billion.
Moody's Investors Service has lowered its debt rating on Allegheny Health, Education and Research Foundation's Allegheny General Hospital in Pittsburgh to A3 from A2. In making the move, Moody's cited the financial drain of AHERF's Philadelphia operations and costly network development activities. The downgrade affects about $103 million in outstanding bonds. Separately, Moody's slashed the bond rating for AHERF's Philadelphia-based hospitals that were formerly known as the Graduate Health System to B2 from Ba2. Moody's said $161 million in bonds are affected. The downgrade, Moody's said, reflects "a precarious financial position" that is unlikely to turn around in the "intermediate term." Moody's moves parallel downgrades by Standard & Poor's last month (Dec. 15, 1997, p. 12).
Woodland Hills, Calif.-based Foundation Health Systems announced this month the formation of an FHS unit called Northeast Region, which will serve more than a million managed-care enrollees in the tristate region of Connecticut, New Jersey and New York. FHS created the unit by merging three of its acquisitions: Shelton, Conn.-based Physicians Health Services; Red Bank, N.J.-based First Option Health Plan; and North Haven Conn.-based M.D. Health Plan. In a deal announced last May and recently completed, FHS purchased Physicians Health Services for $271 million in cash. After that acquisition, FHS converted $70 million in debentures in return for a 98% ownership in First Option. M.D. Health Plan was acquired in March 1995.