Palomar-Pomerado Health System in California has decided it doesn't want a merger after all. The PalomarPomerado board announced Dec. 11 it would discontinue discussions with five health systems. Two years of negotiations with San Diego-based ScrippsHealth brought it close to a merger last summer, but rival Sharp HealthCare, also based in San Diego, derailed talks with an 11th-hour bid. Three other systems quickly followed with their own bids. So Palomar-Pomerado, consisting of 395-bed Palomar Medical Center in Escondido and 258-bed Pomerado Hospital in Poway, said it would convene a panel of local doctors, business leaders and community members to advise the system on future action.
Illinois hospitals will not block a Cook County (Ill.) Circuit Court from approving the state's agreement with the tobacco industry, part of a national settlement struck earlier by state attorneys general and the tobacco industry (Dec. 7, p. 4). The court will rule early this year on whether the 16 hospitals will get a portion of the state's financial settlement or can proceed with their own lawsuit. If the court decides the national agreement settles their claims, the hospitals want a share of the state's $9.1 billion chunk, payable over 25 years.
Tenet Healthcare Corp., Santa Barbara, Calif., has completed its acquisition of a 91-bed hospital in Murrieta, Calif., from Sharp HealthCare, San Diego, for $23.2 million. Sharp signed a letter of intent to sell the facility in November 1997 (Nov. 10, 1997, p. 70). The facility, renamed Rancho Springs Medical Center, will be governed by 12 board members, six of whom will be retained from the current board.
The boards of Summit Medical Center, Oakland, Calif., and Alta Bates Medical Center in nearby Berkeley have approved a definitive merger agreement. The long-awaited merger will make 420-bed Summit an affiliate of Sutter Health, a 26-hospital system based in Sacramento, Calif., that operates Alta Bates. Under terms of the proposed deal, the two hospitals will merge to form a single, not-for-profit corporation run by a 23-member board. Financial terms of the deal, which could face tough sledding with federal antitrust authorities (Nov. 30, p. 12), were not disclosed. But, Sutter has agreed to invest $450 million in the two facilities over the next 10 years. Irwin Hansen, Summit's chief executive officer, will serve as president and CEO of the merged hospitals.
ProxyMed, a Fort Lauderdale, Fla.-based healthcare information technology company, completed the acquisition of Key Communications Service, a provider of remote communications hardware and software for clinical laboratories, in a stock transaction valued at about $22 million. ProxyMed provides on-line clinical and financial electronic data interchange services to physicians, healthcare facilities, insurers and managed-care organizations through a secure information network. Key Communications designs and distributes laboratory results reporting products to more than 1,800 labs nationwide.
The long-awaited trial of seven people in Kansas who allegedly conspired to defraud Medicare will start Jan. 25 in the U.S. Courthouse in Kansas City, Kan. Jackie Williams, U.S. attorney for Kansas, will try two physicians, three hospital executives and two lawyers on charges that they arranged to pay or receive kickbacks in exchange for referrals of Medicare patients to Baptist Medical Center in Kansas City, Mo., and other hospitals. The defendants include Dan Anderson, former chief executive officer of Baptist; Dennis McClatchey, a Baptist senior vice president, who is now on a leave of absence; and Ronald Keel, a former Baptist vice president. All seven defendants are contesting the charges.