Wholesale acute-care hospital prices fell 0.2% in February after a 1.7% rise in January, according to the U.S. Bureau of Labor Statistics' Producer Price Index. Physician prices rose 0.4%, after a 0.7% increase in January. Compared with 12 months earlier, hospital prices were up 5.1% and physician prices were up 3.4%. The January increase for hospitals was the largest one-month increase in 10 years.
One specialty hospital scrubbed
Investors scrapped plans for a 40-bed heart hospital in New Albany, Ind., officially because of increased land costs. But at the same time, concerns were being raised about whether the hospital would be exempted from an 18-month federal ban on physician investment in new specialty hospitals. Investors in the $11 million Kentuckiana Heart Hospital said owners wanted too high a price to renew options for purchasing land. But the for-profit hospital, opposed by not-for-profit facilities in Indiana and nearby Louisville, Ky., also faced questions over whether it had won final zoning board approval by Nov. 18, 2003, the deadline for an exemption from the moratorium. The Louisville cardiologist who heads the investor group did not return calls seeking comment. Mike Laville, an attorney for developer Cardiovascular Hospitals of America, said the uncertain nature of the exemptions was probably a factor.
Another one scrubs up
MedCath Corp., Charlotte, N.C., opened its 13th cardiac-care hospital, 32-bed Heart Hospital of Lafayette (La.). The hospital is MedCath's second in Louisiana and its fifth opening in 18 months. The company blamed hospital startup costs, as well as rising bad debt and supply expenses, for a net loss of $933,000 in fiscal 2004's first quarter, ended Dec. 31, 2003. It has said it may divest hospitals that don't meet its financial or growth objectives.
Mich. may sell Medicaid HMOs
At least two publicly traded health plans are in negotiations with the state of Michigan to purchase financially troubled Medicaid HMOs based in Detroit. Amerigroup Corp. is believed to be considering the purchase of the Wellness Plan, while Coventry Health Care is looking to acquire OmniCare Health Plan, according to Modern Healthcare sister publication Crain's Detroit Business. Both the Wellness Plan and OmniCare are under state-supervised rehabilitation, the insurance equivalent of bankruptcy reorganization. Linda Watters, the director of the Office of Financial and Insurance Services and the court-appointed rehabilitator for the HMOs, declined to comment, saying her office was operating under confidentiality agreements. Coventry did not return calls and an Amerigroup spokesman said the company had no comment.