Companies in the News
Companies in the News
Addus buys Arcadia from IHS
Addus HealthCare (Palatine, IL) bought Arcadia Services (Detroit), a home nursing provider, from Integrated Health Services (Owings Mills, MD). Terms of the April transaction were not disclosed. Arcadia posted revenue in FY98 of about $60 million. The acquisition positions Addus to go public when market conditions turn more favorable for home healthcare, Addus CEO Andrew Wright told Crain’s Detroit Business.
Allied signs agreement with Premier
Allied Healthcare Products (St. Louis) has signed a dual source agreement to offer medical gas construction products to members of Premier Inc. (Charlotte, NC). This equipment includes vacuum pumps, medical air compressors, wall outlets, alarms, and gas manifolds. The agreement makes Allied one of two exclusive providers of medical gas construction products for the roughly 1,700 hospitals and healthcare systems that are part of Premier. Allied’s agreement with Premier becomes effective June 1 and will be in effect until May 31, 2002. The company estimates the agreement could generate $12 million to $15 million in revenues for Allied over the three-year period.
Aurora, Humana team up
Aurora Health Care (Milwaukee), a healthcare system that includes home health agencies, and Humana (Louisville, KY) have signed a new five-year contract. Under the agreement, Aurora will provide a full range of healthcare services to members of Humana’s insurance and managed care plans in eastern Wisconsin, reported the Milwaukee Business Journal. The contract begins July 1 and runs through December 2003. This is the first five-year contract Humana has signed with its Wisconsin plans.
Biomerica’s shares reach a high
Biomerica’s (New York) shares rose 83% last week to a new 52-week high, reported Dow Jones Business News. Company spokesman Mark Fisher didn’t know why shares increased, but said Biomerica’s home healthcare products Web site is due out soon. The site will be a sort of "home drugstore," Fisher said.
Burger signs contract with UC Davis
Burger Rehabilitation Systems (Folsom, CA), a company that contracts with home health agencies, has signed a one-year contract to provide physical rehabilitation services to 45,000 patients of UC Davis Medical Group (Sacramento, CA). In the past, UC Davis contracted with HealthSouth Corp. (Birmingham, AL), as well as Burger, but the university requested proposals last year for one exclusive contract for all patients.
Centennial says revenues are up in 1Q99
Centennial HealthCare Corp. (Atlanta) reported that revenues were up 13% in 1Q99 ended March 31. The company posted revenues of $98 million, compared to $87.1 million in 1Q98. Net income was about $612,000, 5 cents per share, compared to $3.8 million, 32 cents per share, in 1Q98. During 1Q99, the company recorded nonrecurring charges of $600,000 for costs accrued for the company’s terminated proposed merger. The quarter represents the first one under the new prospective payment system for Medicare reimbursement.
Extendicare posts net loss in 1Q99
Extendicare’s (Markham, Ontario) home health operations in Canada brought in $34.6 million of total revenues of $471 million in 1Q99 ended March 31. The total revenues compared to revenues of $518.8 million in 1Q98. The company recorded a net loss of $7.3 million, 10 cents per share, in 1Q99, compared to a net income in 1Q98 of $8.8 million, 11 cents per share.
"In Canada, greater competitiveness in the home care business produced some erosion in the margins of our ParaMed Home Health Care operations," said Extendicare President/CEO Joy Calkin. "In Ontario, which represents 80% of ParaMed’s volume, the government is committed to substantially increasing home care funding, and we are confident that our margins will improve."
Hydrogiene ships order to Sears
Hydrogiene Corp. (San Diego) has shipped its initial order to Sears Roebuck & Co. It will serve as stock inventory before the Sears Home Health Care catalogs are mailed the first week in June. Hydrogiene CTX Systems offer cleanliness and reduced discomfort from ailments, such as hemorrhoids and postoperative surgery.
IHS Home Care changes name
IHS Home Care (Memphis, TN) has changed its name to Soleus Healthcare Services, effective May 15. The change follows the acquisition of IHS by Medshares/IHS Acquisition. Soleus Chairman/CEO Steve Winters said the name change enables the home care agencies to keep their identities as separately owned companies. Winters said changes in the Medicare reimbursement regulations are forcing the industry to consolidate. Soleus has 178 home care locations in 21 states.
IHS reports drop in 1Q99 revenues
Integrated Health Services (IHS; Owings Mills, MD) saw net revenues of $620.4 million in 1Q99 ended March 31, a 19% drop from 1Q98 revenues of $762 million. The company recorded a net loss in 1Q99 of $6.6 million, 13 cents per share, compared to a net income in 1Q98 of $37.6 million, 73 cents per share.
The decline in revenues and earnings, the company said, is primarily the result of the implementation of the prospective payment system (PPS). In response to PPS, the company has experienced a reduction in demand for therapy services in its contract rehabilitation division. IHS also has implemented additional cost reductions.
Because of IHS’ recent shortfalls in earnings, Chairman/CEO Robert Elkins did not receive a multimillion-dollar bonus last year, like he did in 1997, when he received a $3.3 million gift from the company, according to a company proxy statement.
Omnicare buys pharmacy company from Kuala
Kuala Healthcare (Englewood Cliffs, NJ) sold its Bach’s Pharmacy Services (Hackettstown, NJ) to Omnicare (Covington, KY). Omnicare President Joel Gemunder said the acquisition would help the company expand its clinical programs, such as infusion therapy. Kuala President/CEO Jack Rosen said the sale is part of Kuala’s plan to divest non-core businesses in order to focus on managing and developing assisted living facilities. Bach’s revenues are running at the annualized rate of $3.1 million.
Matria sells stake in Internet company
Matria Healthcare (Marietta, GA) sold Microsoft (Redmond, WA) 26% of its stake in WebMD for $4 million. Matria’s initial investment in the Web service that offers medical news and patient data was $2 million. When it made the deal, Matria agreed to market WebMD to its physician customer base, reported the Wall Street Journal.
Olsten closes Tennessee office
Olsten Health Services (Melville, NY) closed its Memphis, TN, home health office last week as part of the company’s restructuring efforts and Medicare cutbacks, reported the Commercial Appeal in Memphis. Olsten closed about 60 offices last year and plans to close about 15 this year. The Memphis office had about 70 employees and almost 300 patients, reported the Appeal.
Star settles with New York for $1.2M
Star Multi Care Services (Huntington Station, NY) has entered into a $1.2 million settlement agreement with the state of New York, ending a criminal investigation of the company by the attorney general’s Medicaid Fraud Control Unit. Under the agreement, the state will release the company, its officers, directors, and employees from any further liability concerning Medicaid payments for home healthcare services from between 1992 and 1996. In return, the company agreed to pay the $1.2 million over four years, with an initial payment of $200,000. Star does not have to admit to any criminal or civil liability, guilt or wrongdoing.
TRL announces 1Q99 results
Revenues for Total Renal Care Holdings (TRL; Torrance, CA) rose 36% in 1Q99 to $352.2 million, compared to $258.7 million in 1Q98. Net income was $27.9 million, 34 cents per share, compared to $22 million, 27 cents per share, in 1Q98. So far this year, TRL has added 39 centers through acquisitions and management agreements.
In other news, TRL has been chosen to provide dialysis and end stage renal disease management services for Kaiser Permanente in northern California. The five-year agreement gives TRL the opportunity to develop an alliance with a managed care organization. It will deliver services through 29 owned clinics and 11 clinics that are part of strategic affiliations.
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