Almost half of all California hospitals considered at risk of collapse during a major earthquake will not meet seismic-safety standards established by a state law 13 years ago, according to a new study conducted by the not-for-profit RAND Corp. for the California HealthCare Foundation. Researchers found that the hospitals collectively will need to spend as much as $110 billion to comply with the deadlines imposed by the lawenacted in 1994 after the Northridge earthquake, which forced three hospitals to close. The cost of financing could double that steep price tag by the time the final deadline for seismic-safety standards arrives in 2030, the report said. Ultimately, patients, employers and taxpayers will pay for the cost of new hospital buildings, said David ONeill, a senior program officer for the foundation, an independent philanthropy based in Oakland. The list of vulnerable structures totals about 1,000 hospital buildings, or more than one-third of the 2,700 hospital buildings in the state, said Jan Emerson, a spokeswoman for the California Hospital Association.
St. Joseph Medical Center, Towson, Md., and St. Agnes HealthCare, Baltimore, announced a strategic alliance aimed at aligning their physician networks, clinical services and community outreach. The hospitals said they will form Mission Health Partners, a joint venture to be funded equally by both partners. The first phase of the partnership will involve specialized services, such as bariatric surgery or certain cancer therapies, and the second phase will include shared information technology. St. Agnes, a 328-bed hospital, is part of Ascension Health. St. Joseph, which has 385 beds, is a member of Catholic Health Initiatives. St. Agnes President Bonnie Phipps said other facilities may be asked to join the partnership at a later date. The deal is expected to close next month.
HHS said it will grant $175 million to help hospitals and healthcare providers in the Gulf Coast that are still recovering from Hurricane Katrina. Of the total, $160 million will be given to acute-care hospitals and skilled-nursing facilities. HHS said in a news release that three states will receive an amount based on each eligible hospitals and skilled-nursing facilitys share of total Medicare payments under a prospective payment system for inpatient care. Therefore, the CMS will allocate
$71.6 million to Louisiana facilities;
$60.5 million to facilities in Mississippi; and $27.8 million to facilities in Alabama. HHS Secretary Mike Leavitt also established a $15 million grant for Louisiana to help attract physicians, dentists, psychiatrists, registered nurses and licensed professional healthcare staff to the greater New Orleans area. According to an HHS representative, funds have been authorized, but the states still have to go through a formal application process by Feb. 1 to receive the money.
A newly formed, not-for-profit group submitted a competing bid to acquire Paradise Valley Hospital, National City, Calif., for $35 million, in an effort to prevent the facilitys planned sale to for-profit Prime Healthcare Services, Victorville, Calif. The group, called Paradise Preservation Group, is led by Fred Harder, who served as the 301-bed hospitals chief executive officer from 1986 to 1997, and is backed by about 40 physicians. We are determined to preserve the rich heritage of Paradise Valley as a not-for-profit charitable trust, which it has been for over 100 years, Harder said. Paradise Valleys owner, Adventist Health, Roseville, Calif., declined to comment on whether it was considering the unsolicited bid but noted it has a signed, binding contract with Prime Healthcare. Twenty-hospital Adventist agreed in November 2006 to sell the money-losing hospital to physician-owned Prime Healthcare for a reported $30 million. Californias attorney general is set to decide by Feb. 19 whether to approve, block or put conditions on the sale to Prime Healthcare, which owns seven other hospitals.
Health Management Associates, Naples, Fla., said it is recapitalizing its balance sheet and will return about $2.4 billion to shareholders through a special dividend. The one-time special cash dividend of $10 per share is payable March 1 to shareholders of record as of Feb. 27. The company said it is suspending its regular dividend indefinitely in light of the special payout. Health Management will record about $200 million in bad-debt expense for the fourth quarter of 2006 as an additional reserve for self-pay receivables. HMA is recapitalizing with $3.25 billion of new senior secured credit facilities, including the refinancing of outstanding debt.
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