* GE Healthcare Financial Services and GE Medical Systems last week announced a seven-year strategic alliance with Kaleida Health, Buffalo, N.Y., that would include $67 million in financing for the five-hospital system. Some $47 million of the financing would be tax exempt, subject to regulatory approvals from the U.S. Department of Housing and Urban Development and the New York State Dormitory Authority. Kaleida also would purchase $8 million of performance improvement and leadership development services from GE. GE said the deal is the most comprehensive announced since the company opted to pursue strategic alliances with the top 200 U.S. hospital systems. Kaleida expects to earn $500,000 on operating revenue of $80 million this year. It lost $13 million in 2002. The financing package would include a 25-year $27 million tax-exempt loan, a five-year $20 million tax-exempt equipment loan and a three-year $20 million line of credit. Proceeds would finance medical equipment purchases and a $30 million renovation at Kaleida's 220-bed Millard Fillmore Suburban Hospital, Williamsville, N.Y.
N.J. hospitals relapse
* The credit and financial profile of New Jersey hospitals has relapsed into a negative outlook, Moody's Investors Service said last week. Although hospital financials appeared to be on the rebound as recently as 2002, several challenges are worsening prospects, including an estimated $300 million reduction in revenue statewide because of new Medicare outlier regulations, Moody's said. Other challenges include cuts in charity-care programs, cash flow crunches as a result of greater managed-care penetration and increasing costs associated with pensions and malpractice insurance.