An eight-member not-for-profit consortium's $1.2 billion deal last month to buy 22 hospitals from Columbia/HCA Healthcare Corp. almost collapsed because of a late snafu, but the crisis was quickly resolved when another buyer stepped in at the 11th hour.
As the deal neared its final stages, consortium member Winston-Salem, N.C.-based Novant Health decided one of the hospitals it had agreed to acquire, Raleigh (N.C.) Community Hospital in Wake County, was too far removed from its main service area to yield any efficiencies. When Novant's board nixed the purchase, Salomon Smith Barney, the consortium's investment banker, scrambled to bring in another partner.
"They were about to light up the victory cigars, and all of a sudden the rug was almost pulled (out from under) their feet," says an analyst familiar with the deal who asked not to be identified. The deal, the analyst says, was hanging by a thread.
Bankers immediately began wooing Durham, N.C.-based Duke University Health System, and a day later the system's board of trustees voted to pursue the purchase.
"This opportunity pretty much dropped out of the sky and into our laps," says Ralph Snyderman, M.D., the system's chief executive officer. He says the system, which operates 1,124-bed Duke University Hospital, had been planning to expand regionally for some time and wanted to develop a presence in Wake County.
Bankers contacted Duke system executives May 14, Snyderman says. Five days later Columbia and the consortium announced the deal. The Duke system is paying $185 million for Raleigh Community. The consortium hopes to close the 22-hospital purchase by October.
And in this corner . . . In the latest round of the ongoing fight over managed-care regulation, the Blue Cross and Blue Shield Association is using advertising to try to bring doctors over to insurers' side of the ring.
The American Medical Association is one of the staunchest supporters of the Patients' Bill of Rights Act, which congressional Democrats introduced in late March, and the Blues is among its harshest critics. Congress has yet to act on the bill.
The Blues says the bill would make it virtually impossible for insurers to offer health plan choices other than HMOs, which wouldn't make doctors too happy.
To warn the medical community, the Blues ran ads in physician publications.
A Blues spokesman who asked not to be identified says several physician specialty groups, including the American Society of Internal Medicine and the American College of Obstetricians and Gynecologists, accepted ads for their publications.
But not the AMA.
The Blues spokesman says the AMA's American Medical News turned down the Blues ad, citing a conflict of interest.
Robert Kennett, interim executive vice president and chief operating officer of the AMA, had no comment about the decision.
Knight leaving BJC. Charles Knight, the influential chairman of BJC Health System in St. Louis, is giving up that position to devote more time to his business obligations. Knight, 62, is chairman of St. Louis-based Emerson Electric Co.
John Dubinsky, 54, will succeed Knight as BJC chairman in June. Dubinsky is chairman of Mercantile Bank of St. Louis.
Knight will remain a trustee of Barnes-Jewish Hospital, flagship of the system. The hospital's new emergency center, now under development, will be named for him.
Knight spearheaded the series of mergers that pulled Barnes Hospital, Jewish Hospital and Christian Hospital into BJC in 1993. BJC now has a 37% market share in the St. Louis region.
Knight's resignation comes just a year after he was appointed to a second five-year term as chairman and a year before Fred Brown, BJC's president and chief executive officer, assumes the chairmanship of the American Hospital Association. Brown's one-year assignment will keep him on the road much of the time. There has been speculation he will retire after his AHA term.
But 57-year-old Brown says, "My full intent is to continue as head of BJC."
Tangled Web. Outliers found out last week how easy it is to make a wrong turn on the information superhighway.
While trying to get a healthcare-related press release off the White House Web page, Outliers ended up on a bondage and fetish World Wide Web site.
How, you ask? Easy. An incorrect suffix in a Web address. Instead of typing www.whitehouse.gov for President Clinton's home, we accidentally typed in www.whitehouse.org.
Big difference! Instead of stately photos of the palace Bill and Hillary call home, Outliers got a screen with three links to choose from: politics, violence, and sex and bondage.
Being Outliers, we tried them all: Clicking on "politics" linked to the real White House Web site, "violence" linked to a site for India's Parliament, and "sex and bondage" linked to a site with, well, bondage and fetish information.
Given the controversy swirling around the White House these days, the Web site confusion was almost understandable.
Put to the test. Parents in West Virginia could be fined for not taking their newborn to see a physician under a new law passed by state legislators during their last session, which ended in March.
Embarrassed by the state's disturbing record for the highest postnatal mortality rates in the nation, the West Virginia Legislature has passed the Birth Score Test bill.
According to the West Virginia State Medical Association, the problem stems from the fact that many babies are delivered by midwives in a rural setting, often in the parents' home or a nonlicensed facility.
The bill requires parents of these newborns to take their babies to a primary-care physician within 10 days of birth. The doctor would administer a birth-score test to determine the health of the child. The test is similar to a regular physical but "scores" different measures of the baby's health.
Parents who do not comply with the law face civil penalties.
The state medical association, which lobbied for the bill, hopes to slash the mortality rate by compelling parents in poor, rural areas to take their infants to WVSMA members' offices.
Too bad they're not willing to foot the bill for the visit, too.