Cardinal Health, Dublin, Ohio, lowered its earnings forecast and announced it had received a subpoena from the Securities and Exchange Commission in connection with an investigation into the company's drug-distribution business. The company, which disclosed the investigation last month, also said it has learned that the U.S. attorney's office for the Southern District of New York has launched an inquiry into the same accounting issue, which reportedly involves how the firm classified millions of dollars as either operating revenue or revenue from bulk deliveries to customer warehouses. Cardinal lowered its projected growth in earnings per share for 2004 to 11%. Earlier guidance had pegged growth in the mid-teens or better. Earnings per share are expected to be 88 cents to 91 cents for the quarter and $3.46 to $3.49 for the year.
FTC ends lookback investigation
The Federal Trade Commission voted 3-2 to end its lookback investigation into the 2000 formation of Vista Health out of Victory Memorial Hospital and Provena St. Therese Medical Center, both in Waukegan, Ill. FTC staff had recommended closing the investigation without action in July 2003, but it took a year for the commission to officially do so. Vista Health President and Chief Executive Officer Tim Harrington said, "The FTC decision is another step forward for us in our plan to consolidate Victory and St. Therese hospitals. We were confident there was no wrong-doing on Vista Health's part." The FTC began a study of previously consummated hospital mergers under former FTC Chairman Timothy Muris. As a result, the FTC challenged the 2000 acquisition of Highland Park (Ill.) Hospital by Evanston (Ill.) Northwestern Healthcare. The case is pending. The agency is investigating at least six other hospital mergers, hospital officials have confirmed.
Becton to pay RTI $100 million
Becton, Dickinson and Co. will pay $100 million to Retractable Technologies Inc., Little Elm, Texas, to settle an antitrust lawsuit brought by RTI, and the suit will be dismissed, Becton announced. The lawsuit, filed in 2001 in U.S. District Court in Texarkana, Texas, accused Becton of using its industry position to restrict RTI from entering the market for safety syringes. RTI also named Tyco Healthcare Group, hospital alliances Premier and VHA, and VHA's group purchasing arm, Novation; all but Becton settled in 2003. At deadline, RTI officials had not returned a phone call. In a news release, Edward Ludwig, Becton's chairman, president and chief executive officer, said the settlement would allow the company to concentrate on product development.
N.J. releases first report card
New Jersey's health department released the state's first hospital report card to consumers, providing details on the Web about the performance of 82 general acute-care facilities. Results appear in descending order of overall score as well as by region. The report focuses on measures of quality in treating heart attacks and pneumonia and devotes a half-dozen of its 25 pages to advice for consumers on taking an active role in their care and patients' rights. The measures are derived from a set of 10 already collected by hospitals as part of the National Voluntary Hospital Reporting Initiative, a public-private partnership that posts data on a CMS Web site. New Jersey joins at least four other states or regions that have a separate report on the Web or in the works: Connecticut, the Kansas City areas of Kansas and Missouri, Rhode Island, and Wisconsin.