News Briefs
News Briefs
FDA advises blood banks to take precautions
The Food and Drug Administration (FDA) has directed blood banks over the next six months to ban potential donors who have spent six months or more cumulatively in the United Kingdom between Jan. 1, 1980, and Dec. 31, 1996, during which time the county was in the throes of an outbreak of mad cow disease.
The precautionary measure, according to the FDA, is necessary to keep the risk of blood supply contamination at a minimum.
While no direct link has been proven, it’s believed that exposure to such contaminated products could lead to fatal brain disease in people. The nation’s blood banks, already facing a shortage, predict that the ban will further reduce donations by 2.2%.
Organizations announce mergers and acquisitions
Melville, NY-based Olsten Corp. announced the sale of its staffing services to Adecco, a Swiss employment services company based in Lausanne, in a deal worth an estimated $710 million in cash and stock. In more Olsten news, the company will spin off its home health care operations in to a separate company, a deal worth an estimated $1.5 billion. The company will be renamed once the deal passes regulatory and shareholder approvals, which is expected to come sometime around the end of the year.
Iowa Health System in Des Moines and Trinity Regional Health System in Rock Island, IL, have announced a merger-like partnership which was expected to become effective Oct. 1. According to the two parties, assets will remain separate even thought the eight- and two-hospital systems, respectively, will consolidate their debts.
Winston Salem-based Partners National Health Plans of North Carolina, a for-profit subsidiary of the not-for-profit Novant Health, is set to purchase Kaiser Foundation Health Plan’s employer-sponsored and Medicare managed-care plans in the Durham, Raleigh, and Chapel Hill area. Kaiser has some 73,000 members, while Partners has about 3,000 members throughout the Raleigh-Durham area.
Tenet, Iasis make moves to purchase hospitals
Iasis Healthcare Corp. in Nashville, TN, is barely a year old and already it’s made a name for itself with the announcement that it will purchase 10 of the 20 hospitals, which Tenet Healthcare Corp. in Santa Barbara, CA, is trying to sell.
The hospitals, located in Arizona, Florida, and Texas, will cost the company an estimated $520 million. Four of them had been inherited by Tenet when it bought OrNda HealthCorp., five were once members of American Medical International (AMI), and the last one once belonged to National Medical Enterprises which, when it merged with AMI in 1995, formed Tenet.
Tenet, meanwhile, has announced plans to close its 47-bed Community Hospital Medical Center in Phoenix, saying that with an average daily census of about 13 patients it was no longer economically feasible to keep it running.
In related news, Iasis is also in line to purchase five hospitals in the Salt Lake City area from Paracelsus Healthcare Corp. in Houston for about $280 million. Paracelsus, which reported a net loss of $7.6 million for the second quarter of this year, will retain 6% interest in the companies.
This week, on Court TV
Beverly Enterprises, which has been under investigation by the Justice Department and the Health and Human Services inspector general’s office for the past 11 years for allocating excessive nursing labor costs to its Medicare- certified units, now says that as many as 10 of its nursing homes may be excluded from Medicare as part of a settlement with the federal government. Subject to completion of documents, the settlement would require the long-term care company to pay $5 million in criminal fines and $170 million in civil penalties.
Coram Healthcare Inc., a Denver-based provider of home infusion therapy, has terminated a master agreement with Aetna US Healthcare to manage the company’s home health services throughout the northeast and mid-Atlantic, filing a $40 million lawsuit on June 30 alleging fraud, misrepresentation, breach of contract, and recision on the part of Aetna.
On Aug. 19, Coram’s competitor Apria Healthcare Group in Costa Mesa, CA, filed an involuntary bankruptcy proceeding, this time against Coram Resource Network, a subsidiary specializing in the management of home healthcare provider networks on behalf of managed care plans and other payers.
Apria claims that the subsidiary failed to pay it $1.4 million for services rendered. While Coram waits for its day in court, sometime in April 2000, the company has its eye set on redesign of the firm’s 88 branches, the creation of an e-commerce presence, and the expansion
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