New York's Mount Sinai-NYU Health System became the first healthcare organization to issue tax-exempt debt over the Internet in April, ushering in a new era in bond trading.
But debate rages over whether online trading will boost demand for healthcare bonds.
The lead underwriter on the $560 million issue, Goldman Sachs & Co., claims its proprietary World Wide Web site broadened investor access to the deal. The issue yielded a rate of 6.64%, lower than the 6.73% price of a $176 million issue by Fairview Health Services in Minneapolis, which went out the same week with a slightly higher credit rating.
More online trading is likely. Investment banks such as Lehman Brothers and J.P. Morgan Securities also have begun using the Internet for bond deals.
Holding out, however, is Salomon Smith Barney, the largest healthcare underwriter. It has no plans to sell bonds via the Internet, preferring to stick with its 11,000-member national sales force. The firm was a member of the underwriting group of investment bankers that issued the Mount Sinai-NYU securities but had no involvement in the Internet sale. Salomon was also the lead underwriter on the Fairview bond issue.
Tom Whalen, a director at Salomon, says Internet trading may lower costs for investment banks but could result in higher interest rates for issuers by eliminating investor feedback. He says Mount Sinai-NYU garnered a favorable interest rate because of its well-known name, tax advantages for New York bonds and an abundance of New York-only bond funds.
Do investors care either way? Whalen says: "It doesn't make a hill of beans difference."
Diagnosis: politics. The Association of American Physicians and Surgeons, a conservative group best known for its vocal opposition to President Clinton's 1994 healthcare reform plan, is the latest group to exploit the custody battle over Elian Gonzalez.
The association claims the Clinton administration is using friendly physicians to obtain diagnoses favorable to its decision to forcibly remove the boy from his relatives' home and reunite him with his father.
"Based on the experience of the past two weeks, we're not confident that the glowing reports from anonymous government doctors of the boy's easy adjustment following a traumatic seizure at gunpoint are indeed unbiased or, for that matter, (based on) first-hand observations," wrote Jane Orient, M.D., the group's executive director, in a letter to the Immigration and Naturalization Service and the U.S. Justice Department.
The group took issue with the alleged appointment of a New York pediatrician, Irwin Redlener, to consult with the government on the boy's case. Redlener, who is president of the children's hospital at 1,032-bed Montefiore Medical Center in New York, is a consultant to vice president Al Gore's presidential campaign and served on President Clinton's Health Care Task Force in 1993.
"We are appalled that the Justice Department and the INS may have relied on the armchair diagnosis of an unqualified administration operative," Orient wrote.
But that is no more appalling than the use of a 6-year-old to further one's political agenda.
The name game. Some times you have to take a step back to move forward. In a reversal of the name-changing fever that has recently resulted in longer names for too many hospital associations across the country, the Association of Iowa Hospitals and Health Systems is reverting to its former name, which used to be and is again the Iowa Hospital Association.
President Stephen Brenton expanded the name in 1995 to accommodate the growing number of hospitals that were evolving into integrated systems. The switch back is a concession to convenience, spokeswoman Klare Black Logan says. "[The longer name] never really caught on . . . and for those of us who say it a million times a day, [the new-old name] will be a lot easier to say."
More than a few other state associations could do with a similar name-shortening. Kentucky, Georgia, Montana, Ohio: how about it?
Testing failure. Responding to demand from foreign-born doctors, Florida last year became the first state to offer an alternative to the U.S. Medical Licensing Exam, the test that qualifies physicians to practice. In 1996, Florida's Legislature allocated $1.2 million to develop an alternative after a group of primarily Cuban- and Nicaraguan-born refugee physicians failed the standard exam.
But the new test didn't change things much: Only four of the 260 doctors who took it in May 1999 passed. The Florida International Medical Association, which represents the foreign-born doctors, complained of ethnic bias and demanded a new version. The state complied, offering the new test in Spanish with fewer questions about basic science. But in November 1999, all but eight of the 87 foreign-born physicians who took the revised test failed, according to Bill Parizek, a spokesman for the Florida Department of Health. He blamed the number of years that the doctors have been out of practice and the high-tech aspects of U.S. medicine.
But the state remains undaunted: It's going to give the test again this month.
"After the last exam we reviewed the test and checked for cultural bias and fairness," Parizek says. "A few revisions were done, but it's essentially the same format."