HealthSouth Corp., Birmingham, Ala., said the fiscal 2006 changes to Medicare inpatient prospective payments would lower payments to the company by 3.6% -- or $10 million in the last three months of 2005 -- compared with the aggregate increase of 3.4% that providers overall are expected to see, the company said at an investors' meeting today. The increases go mainly to rural and teaching facilities and not urban for-profit facilities, said HealthSouth, which holds 30% of that market.
In other earnings news, Vanguard Health Systems, Nashville, reported a loss of nearly $80 million for fiscal 2005, ended June 30, because of $182.2 million in pretax expenses related to its recapitalization. Vanguard said it lost $79.1 million for the fiscal year, compared with a profit of $36.1 million in fiscal 2004. Revenue was up 27.3%, to $2.27 billion. The revenue increase is due in part to the addition of three hospitals Vanguard bought from Dallas-based Tenet Healthcare Corp., effective Dec. 31, 2004. And SunLink Health Systems, Atlanta, reported a $4.4 million profit on continuing operations for fiscal 2005, also ended June 30, compared with a loss of $1.3 million on continuing operations in the prior year. But the company's bottom line fell short of the previous year because of the sale of a hospital in 2004 that boosted profits. Revenue was up 14.5%, to $128.7 million. -- by Vince Galloro and Joseph Mantone