Two suitors for Health Midwest
* Health Midwest, Kansas City, Mo., a not-for-profit system that owns nine hospitals, said last week it has whittled its list of potential buyers from at least five to two-HCA, Nashville, and Tenet Healthcare Corp., Santa Barbara, Calif. Health Midwest said the decision to enter more extensive talks with HCA and Tenet does not imply a final decision to sell the system. Last year, Health Midwest laid off seven vice presidents to cut costs and closed 334-bed Trinity Lutheran Hospital, Kansas City. For-profits Ardent Health Services, Nashville, and Triad Hospitals, Dallas, both expressed interest in the system, according to sources familiar with the situation. Saint Luke's-Shawnee Mission Health System, an eight-hospital not-for-profit system based in Kansas City, also publicly stated an interest in a deal with Health Midwest.
* The University of Missouri, Columbia, said last week it has authorized its University of Missouri Health Care to hire an outside consulting firm to help manage the hospital system for up to two years. The system has lost money for the past three years. The system lost $8.8 million in fiscal 2001 and $23.5 million in fiscal 2000. Preliminary data show a $4.9 million loss for the fiscal year ended June 30, spokesman Maurice Manring said. The system is expected to hire the Hunter Group, St. Petersburg, Fla.
N.Y. hospital sues KPMG
* Nyack (N.Y.) Hospital filed a $50 million lawsuit last month against its former auditor, KPMG, and two of the firm's certified public accountants, claiming they failed to report the 317-bed hospital's finances accurately. The suit was filed in the Supreme Court of Rockland County, New City, N.Y. The hospital already is in litigation against its former chief financial officer, Eric Broder; the hospital claims he hid the true cost of a nursing strike. The hospital recently restated two years of financial results after KPMG terminated its relationship earlier this year (July 29, p. 9). KPMG spokesman Tim Connolly said, "We do not believe there is any basis for the claim."