Oxford obtains loan, seeks more permanent financing. Troubled Oxford Health Plans has obtained a $100 million loan from Donaldson, Lufkin & Jenrette Securities Corp., according to a Securities and Exchange Commission filing. A company spokeswoman said the loan was for "capital contributions to certain of our HMO subsidiaries" and that Oxford is seeking more permanent financing. She would not confirm reports that buyout firms are discussing investments in the troubled company, which lost $78.2 million in the third quarter and is expected to report a fourth-quarter loss.
PhyMatrix unit buys Mass. research center's assets. Clinical Studies, a subsidiary of West Palm Beach, Fla.-based PhyMatrix, has acquired the assets of New England Research Center in Dartmouth, Mass. It also entered a 40-year agreement with the center's physicians and employees to manage clinical trials. Terms were not disclosed. The center specializes in respiratory clinical research. Clinical Studies, based in Providence, R.I., operates 34 owned and affiliated clinical research facilities in 13 states.
Adventist Health acquires Calif. hospital. Adventist Health, Roseville, Calif., last week acquired 115-bed South Coast Medical Center for undisclosed terms. South Coast, located in the Orange County community of South Laguna, Calif., had been a stand-alone facility. An Adventist spokeswoman said the acquisition had been approved by all state regulators. The acquisition gives Adventist 18 hospitals, including 13 in California.
Mass. Blues drops Medicaid contract. Blue Cross and Blue Shield of Massachusetts is pulling out of the Medicaid business, electing not to sign a new five-year contract with the state after losing about $7 million annually for three consecutive years. Its contract runs through June, after which its 41,000 Medicaid beneficiaries will have to move to one of the other 10 insurers under contract. About 473,000 beneficiaries are served by the 11 companies.
GAO sustains contract protest against Defense Department. The Defense Department was wrong in awarding Anthem Alliance for Health a $3.1 billion, five-year contract to cover 1 million military beneficiaries in 10 Mid-Atlantic and Midwestern states, the General Accounting Office has decided. The GAO sustained a protest by Foundation Health Federal Services and Humana Military Healthcare Services against the awarding of a Tricare managed-care contract to Indianapolis-based Anthem. Although the decision is not binding on the Pentagon, when the GAO sustains a contract protest, the federal agency usually solicits new bids. The Pentagon has 60 days to decide what it will do next.
Shareholders approve McKesson-AmeriSource merger. Shareholders of McKesson Corp. and AmeriSource Health approved the merger of the two drug distributors in separate Feb. 9 meetings. Under the terms of the merger agreement that was announced last September and is still pending federal antitrust clearance, AmeriSource shareholders would receive 1.42 shares of McKesson stock for each share of AmeriSource (Sept. 29, 1997, p. 12). San Francisco-based McKesson has annualized revenues of $18 billion. Malvern, Pa.-based AmeriSource has $9 billion in annualized sales.
Mass. health system executive resigns. The top executive of a Boston-area health system has resigned abruptly. Michael Geaney, president and chief executive officer of North Shore Medical Center in Salem, Mass., had led the organization since 1975, when it was Salem Hospital. Merger activity in the early 1990s expanded the system to include North Shore Children's Hospital and Shaughnessy-Kaplan Rehabilitation Hospital. In 1997 AtlantiCare Medical Center in nearby Lynn became part of the North Shore system. In 1996 the system became a corporate member of a larger regional healthcare organization, Partners HealthCare System. Geaney, 52, had planned to retire in two years but accelerated his plans after completing the AtlantiCare merger, said spokeswoman Bonnie Kaplan.