GM, Medscape compute. Automaker General Motors Corp., Detroit, said last week that it will sponsor the distribution of hand-held computers to 5,000 physicians serving its 1.2 million-member health plan. In a partnership with GM, online health giant Medscape, New York, will supply the devices and software to identify appropriate prescribing and possible errors. The two companies said they would develop a method to calculate resulting savings, if any, and share the money. The computers are capable of using Medscape's electronic medical record software, but it wasn't clear if the agreement includes free or discounted software. As part of the agreement, GM will receive warrants for 5 million Medscape shares. The company has 55 million shares outstanding.
Mediq files for bankruptcy. Medical-equipment dealer Mediq, Pennsauken, N.J., last week filed for Chapter 11 bankruptcy protection. The company has $3 million in assets and $120 million in debts, according to bankruptcy documents filed in Delaware. Company officials said a 1998 leveraged buyout, refinancing and an acquisition left the company $476 million in debt. It spent $77.5 million on acquisitions in 1999. A holding company, Mediq says it operates the county's largest movable critical-care and life-support medical equipment rental business.
Systems outsource IT services. Two prominent health systems last week handed off their information technology services to an outside vendor. The University of Pennsylvania Health System, Philadelphia, said it has signed a five-year, $100 million agreement with First Consulting Group, Long Beach, Calif., and Affiliated Computer Services, Dallas. UPHS expects to save $19 million in operating costs over the life of the contract. Henry Ford Health System in Detroit also announced an information systems outsourcing deal valued at $82 million over five years with Farmington Hills, Mich.-based Complete Business Solutions.
Medibuy buys Premier exchange. Medibuy.com, San Diego, last week completed its previously announced acquisition of Premier Health Exchange, the former electronic commerce company of Premier. The deal, as announced in March 2000, designates Medibuy as the exclusive Premier-promoted e-commerce firm for six years. Financial details were not disclosed.
Hill-Rom lays off 200 employees. Hill-Rom Co., Batesville, Ind., said last week that it's laying off 200 people, about half from the bedmaker's home-care and long-term-care operations in Charleston, S.C. The reorganization includes a charge of up to $12 million against first-quarter earnings but will save as much as $20 million annually, company officials said. Hill-Rom also will change product offerings in those business areas as part of the streamlining initiative. Officials said the company's strategy must be redefined because of unreliable Medicare reimbursement in home care and adverse economics in long-term care. The announcement came on the same day Hill-Rom's new president and chief executive officer, R. Ernest Waaser, 44, took the helm.
Public changes views on providers. Public support for cutting Medicare payments to hospitals, doctors and other providers has plummeted since 1998, according to the results of a poll by the Harvard School of Public Health and the Kaiser Family Foundation. In 1998, shortly after enactment of the Balanced Budget Act of 1997, 61% of voters saw reducing Medicare provider payments as a way to improve Medicare financing. A poll in November and December 2000 found that 33% of voters supported that option.