Province Healthcare Sets Goal of Annual EPS growth Of 25%

Province Healthcare Co. an owner and operator of U.S. hospitals, said set a goal of growing per-share earnings by 25 percent annually. The company said its objective was to earn 26 cents a diluted share in the first quarter; 22 cents in the second quarter; 21 cents in the third quarter, and 30 cents in the fourth quarter. Analysts expected 26 cents; 23 cents; 22 cents and 28 cents a share, respectively, for the four quarters, according to First Call/Thomson Financial, which tracks earnings data.

      Province Healthcare also said its 2001 objective for same-store revenue growth was 4 percent to 8 percent. Same store refers to revenues at hospitals owned or operated for at least a year.

      The company also said its 2001 goal was to acquire two to four hospitals per year, with capital expenditures of $40 million to $45 million. Back to TOC.

WebMD Announces Stock Buy-Back Program

WebMD Corporation has announced a stock buy-back program. Under the program, WebMD may use up to $50,000,000 to purchase shares of its common stock from time to time beginning next week, subject to market conditions. Such purchases may be made in either open market or private transactions. These announcements do not obligate the company to actually purchase the shares.

      WebMD provides connectivity and a full suite of services to the healthcare industry that improve administrative efficiencies and clinical effectiveness enabling high-quality patient care. The Company's products and services facilitate information exchange, communication and transactions between the consumer, physician and healthcare institutions. WebMD continues to hold great promise in these areas but has been hammered on Wall Street. Shares were trading around $70 per share in February 2000 and now hover between $5-10 per share. Back to TOC.

Allina Health System Under Investigation By Attorney General

Threatening to soil the reputation of one of the country's most prominent not-for-profit healthcare systems, Minnesota's attorney general has accused the managed-care subsidiary of Allina Health System of misspending its money on executive perks.

      In a story in Modern Healthcare, Allina has denied the allegations but said it will cooperate with the state's investigation of Medica, Allina's 1 million-enrollee HMO. Minnetonka, Minn.-based Allina also operates 19 hospitals, 48 clinics and four nursing homes.

      The 49-page memorandum filed in Hennepin County (Minn.) District Court, Minnesota Attorney General Mike Hatch alleged the plan engaged in lavish spending on image consultants, executive salaries and perks and corporate entertaining. Hatch also claimed that Medica did not report this spending under administrative accounts. Instead, he claimed, much of it was hidden under accounts that suggested the expenses were directly related to medical care.

      The scrutiny comes amid HMO premium increases of 7.4% in 1998 and 11.7% in 1999 after two years of increases less than 2%, according to the most recent figures from the Minnesota Department of Health. Hatch said his office intends to investigate the business practices of other large not-for-profit health insurers in the state.

      Allina was formed by the high-profile 1994 merger of for-profit Medica Health Plan and not-for-profit HealthSpan Health Systems. The merger was closely watched as a harbinger for integrated systems, with hospitals, physicians and health plans working together under one corporate umbrella. Allina finished 31st in this year's ranking of the 100 most integrated healthcare systems. Back to TOC.

UnitedHealth Reaffirms 2001 EPS Growth of 18-20 Percent

UnitedHealth Group Inc. reiterated that it expects per-share earnings to grow 18 to 20 percent this year. While at The Banc of America Securities Healthcare conference in Las Vegas, it expects EPS growth of at least 15 percent in 2002 and beyond.

      They project per-share earnings of $2.52 in 2001, revenues of $23.0 billion and earnings from operations of $1.43 billion. In 2000, the company said it posted per-share earnings of $2.10; revenues of $21.12 billion; and earnings from operations of $1.20 billion.

      Analysts on average had expected the company to earn $2.53 a share in 2001 and $2.92 a share in 2002, according to Thomson Financial/First In addition, the company said in a document filed with the U.S. Securities and Exchange Commission that it expects 2001 revenues at its Uniprise division to be about $2.3 billion to $2.4 billion and operating margins of about 14 to 15 percent. Uniprise provides services to large employers and health plans. UnitedHealth is the nation's No. 2 managed care company behind industry leader Aetna Inc. Back to TOC.

Kentucky Medical Licensure Board Will Warn Doctors Not to Accept Gifts

Doctors risk ethical problems if they accept gifts, such as expensive meals, from drug companies, the Kentucky Board of Medical Licensure says.

      The board will deliver that message to the state's approximately 8,000 physicians with an article in its next quarterly newsletter.

      While it's "unrealistic" to conclude that all meals and other gifts from drug companies are unethical, federal law prohibits a physician from giving or receiving anything of value in exchange for a referral. By bringing ethical questions to doctors' attention, the board might be able to curtail the gift-giving and gift-accepting practice.

      Representatives of two large pharmaceutical companies said in telephone interviews with the Courier-Journal that they have policies that limit the gifts their sales staffs can give doctors. Nonetheless, the giving of larger presents is widespread. Drug companies sometimes conduct functions where doctors are invited to a store for dinner and a talk by a drug company representative and can leave with $75 or more in free merchandise. Back to TOC.

Justice Dept Files Complaints against HCA

The Justice Department said Friday it filed civil complaints in eight whistle-blower lawsuits alleging hundreds of millions of dollars in fraud, including physician kickbacks and inflated cost reports, by HCA-Healthcare Corp., the largest U.S. hospital chain. It said the lawsuits allege that HCA, formerly known as Columbia-HCA Healthcare Corp., over the past decade systematically made unlawful claims from Medicare, Medicaid and other federally funded health-care programs.

      The Justice Department said the claims were not covered by the agreement HCA reached last year to pay a $745 million civil settlement and $95 million in criminal fines to resolve some of the allegations arising from a federal investigation that began in 1997.

      The department said the lawsuits mainly involve payments of kickbacks to physicians to increase the numbers of government-insured patients, the inflation of hospital cost reports to increase Medicare and other government reimbursement, and kickbacks and inflated cost reports for wound-care services.

      The Justice Department said the lawsuits are pending in federal court in Washington, where 28 whistle-blower lawsuits against HCA have been consolidated.

      The Justice Department said last year's partial settlement mainly covered allegations involving laboratory billing, home health overbilling, charging of nonreimbursable home health costs disguised as management fees and community education, and use of billing codes that provided higher payments than those that actually reflected the services furnished to patients. Health Management Associates Sees Second Quarter Earnings Lowered

      Health Management Associates Inc. said its second-quarter profit would be reduced by a $17 million non-cash charge connected to its chairman's retirement.

      The Naples, Fla.-based company, which recently named a new chief financial officer, said it expects to report a second-quarter profit of 23 cents a share, before giving effect to the charge.

      For fiscal 2001, Health Management said it expects earnings before interest, taxation, depreciation and amortization to come in between $425-$450 million, or 78-80 cents on a per-share basis, also excluding the charge. The net effect of the charge will reduce net income by $10.3 million and lower earnings per share by four cents, the company said. Analysts are on average expecting the company to earn 23 cents per share for the second quarter, and 79 cents per share for the fiscal year, according to market research firm First Call/Thomson Financial. Back to TOC.

HealthSouth, Oracle to Build Digital Hospital

The hospital's technological features will include patient beds with display screens connected to the Internet, electronic medical records storage, digital imaging instead of traditional X-ray film, and a wireless communications network that will permit doctors, nurses and other healthcare professionals, armed with lightweight portable computers, to securely update and access patients' medical records from anywhere in the hospital -- or around the world.

      Technological improvements have increased operating efficiencies and reduced costs in many industries. The benefits, however, have been less realized in healthcare because of incompatible computer systems, lack of integration among equipment manufacturers and other obstacles. HealthSouth and Oracle expect to avoid these problems by bringing on board nine of the most respected medical equipment manufacturers to work with them in the design, construction and integration of equipment that will be used in the new digital hospital.

      Both parties are contributing significant resources to the initiative. HealthSouth expects to spend $100 million to $125 million over 24 to 32 months for constructing and equipping the hospital, which will be built near HealthSouth's 92-acre campus in suburban Birmingham, Alabama. A portion of that cost will be offset by previously planned expenditures, and the total cost is expected to be well within HealthSouth's existing capital expenditure budget. Pending receipt of the necessary construction and regulatory approvals, groundbreaking for the more than 500,000 square foot, 219-bed facility is scheduled to begin in the first quarter of 2002. Construction is expected to be completed by mid to late 2003. Back to TOC.

LifePoint Hospitals Prices 3.2 Million Share Offering at $29/shr

LifePoint Hospitals Inc., which operates 21 hospitals in seven states, stated the 3.2 million shares of its common stock in a public offering would be priced at $29 per share, the net proceeds of which will be used to pay off its debt.

      The Brentwood, Tenn.-based company said all 3.2 million shares are being sold by the company. Merrill Lynch & Co. and Credit Suisse First Boston are the co-lead underwriters for the offering. Salomon Smith Barney, SunTrust Equitable Securities and UBS Warburg LLC are serving as co-managers. The company said it granted the underwriters an option for a period of up to 30 days to purchase up to 480,000 additional common shares to cover any over-allotments. Back to TOC.

In This Issue--Also See Archive

Province Healthcare Sets Growth Goal

Province Healthcare Co. an owner and operator of U.S. hospitals, said set a goal of growing per-share earnings by 25%...

WebMD Plans Stock Buy Back

WebMD Corporation has announced a stock buy-back program. Under the program, WebMD may use

Allina Under Investigation

Threatening to soil the reputation of one of the country's most prominent not-for-profit healthcare systems

UnitedHealth Predicts Strong Growth

UnitedHealth Group Inc. reiterated that it expects per-share earnings to grow 18 to 20 percent this year. ...

Kentucky Board Nixes Drug Co. Gifts

Doctors risk ethical problems if they accept gifts, such as expensive meals, from drug companies, the Kentucky...

Justice Files against HCA

The Justice Department said Friday it filed civil complaints in eight whistle-blower lawsuits alleging hundreds

HealthSouth & Oracle Partner in Digital Hospital

The hospital's technological features will include patient beds with display screens connected to the Internet...

LifePoint IPO

LifePoint Hospitals Inc., which operates 21 hospitals in seven states, stated the 3.2 million shares of its com...

Trigon Reports Q4 Results

Trigon has reported a 39 Percent Increase in EPS, Excluding Realized Gains/Losses 18 Percent...

Tenet Healthcare Buys 3 Hospitals

Intracoastal Health Systems has agreed to sell two medical centers in West Palm Beach, Fla. to Tenet Healthcare...

UHS Grabs Large French Hospital Co.

Universal Health Services, Inc. has announced it has purchased an 80% interest in the fourth largest operator...

Vanguard Acquires PMH Health Resources

Vanguard looks to complete a deal to acquire the troubled Phoenix-based hospital and health plan operator...

US Oncology Announces 2000 Results

US Oncology, Inc. has announced results for the fourth quarter and twelve months ended December...

CHS Finishes Strong in 2000

The fiscal year ended December 31, 2000, generated $1.34 billion in net operating revenues and $252.7 mil

Trigon Reports Fourth Quarter 2000 Results

Trigon has reported a 39 Percent Increase in EPS, Excluding Realized Gains/Losses 18 Percent Increase in Commercial Premium Revenue Fueled by 10 Percent Increase in Membership

      Commercial premium revenue for the fourth quarter was $493.2 million, an 18 percent increase over the $417.6 million reported in 1999's fourth quarter. Total premium and fee revenue rose 14 percent to $654.9 million from $574.3 million a year earlier. Self-funded fee income increased to $42.0 million. Year-over-year commercial enrollment increased by 10 percent to 1,072,913 members, while self-funded membership climbed 6 percent to 716,012. Total membership stood at 2,015,330 compared with 1,868,351 members at year-end 1999, an 8 percent increase.

      Operating income for the quarter, which is measured as premium and fee revenues less medical claims and administrative expenses, increased by 76 percent to $25.8 million from $14.7 million in 1999, producing an operating margin of 3.9 percent. Investment income was $28.8 million compared with $26.3 million in the prior year.

      Analyst consensus EPS estimates -- which are calculated to exclude realized gains and losses -- averaged $0.85 for the fourth quarter of 2000. Net income for the quarter was $21.0 million, or $0.54 per diluted share, reflecting a $19.1 million realized loss in Trigon's investment portfolio during the quarter. Back to TOC.

Tenet Buys 2 hospitals in West Palm Beach, 1 in Atlanta

Intracoastal Health Systems has agreed to sell two medical centers in West Palm Beach, Fla. to Tenet Healthcare Corp., the No. 2 U.S. hospital operator.

      The assets being sold generated annualized net revenues of approximately $260 million in the most recent period, the companies said in a statement. Tenet agreed to operate the hospitals as acute-care facilities for at least 10 years and agreed to invest in significant capital improvements at both facilities.

      In addition, Tenet Healthcare Corp. stated bid to acquire South Fulton Medical Center through a subsidiary was accepted by a U.S. Bankruptcy Court in Atlanta. The hospital will add to Tenet's presence in Atlanta which includes four acute-care hospitals in the greater Atlanta area.

      Georgia International Health Alliance, the parent company of South Fulton Medical Center, filed for Chapter 11 bankruptcy protection in April 2000. South Fulton Medical Center, a 369-bed acute-care hospital located in East Point, a suburb of Atlanta, reported net operating revenues of about $85 million last year. Back to TOC.

UHS Acquires Fourth Largest Private Hospital Company in France

Universal Health Services, Inc. has announced it has purchased an 80% interest in the fourth largest operator of private hospitals in France for approximately $75 million. The remaining 20% is owned by management led by Mr. Frederic Dubois as President.

      The new company formed by UHS to complete the transaction is named Medi-Partenaires. Medi-Partenaires currently owns eight hospitals and produced approximately $75 million of net revenues in its fiscal year ended December 2000. The company's strategy is to selectively acquire hospitals with high market shares in mid-sized towns throughout France.

      Universal Health Services, Inc. is the country's third largest hospital management company and operates facilities nationwide including medical, surgical and behavioral health hospitals and ambulatory surgery and radiation therapy centers. Back to TOC.

Vanguard Health Systems To Acquire PMH Health Resources of Phoenix

Vanguard looks to complete a deal to acquire the troubled Phoenix-based hospital and health plan operator this spring. But PMH President Reginald Ballantyne, a past American Hospital Association chairman, has secured his near-term future. As part of the proposed sale, he and Phoenix Health Plan President Nancy Novick would negotiate an employment agreement if for-profit Vanguard completes the acquisition by early May.

      Both Ballantyne and Novick are beneficiaries of a deliberate strategy used by Vanguard, and that's to retain the top executives at acquired hospitals-even hospitals that filed for reorganization.

      ``It's not unusual for an entity to take on the current management team . . . you don't generally have a bench around to immediately bring in,'' says Robert Galloway, Vanguard's senior vice president of development.

      Not-for-profit PMH, which operates 195-bed Phoenix Memorial Health System and Phoenix Health Plan, a 50,000-enrollee Medicaid HMO, filed for Chapter 11 bankruptcy protection on Feb. 1. The filing in federal bankruptcy court in Phoenix was made under Section 363, a provision allowing for a quick disposition of the debtor's assets. Vanguard intends to acquire PMH for $39 million in cash and debt assumption as part of an auction supervised by the bankruptcy court.

      Vanguard is acquiring virtually all of PMH's assets, except for accounts receivable, $12.3 million in Medicare disproportionate share payments from HCFA and real estate holdings, including three medical buildings. If no other bids are received, those assets will be used to pay off PMH's bondholders, who should receive about 70 cents on the dollar, Ballantyne says. Assets held by an affiliated charitable foundation are also excluded from the sale, Ballantyne adds.

      ``Vanguard had asked which executives were important and should be retained,'' Ballantyne says of the three-line provision about his and Novick's retention, which is tucked deep into the 61-page agreement and doesn't mention their names. The bankruptcy filing didn't state Novick and Ballantyne's salary requirements. As head of PMH, Ballantyne earned a salary of $469,545 and benefits worth an additional $145,023 for the fiscal year ending June 30, 1999, according to PMH's most recent Form 990 filing with the Internal Revenue Service. Novick's salary and benefits weren't disclosed in the filing. If Ballantyne becomes a Vanguard employee, he says he would give up any severance benefits. Back to TOC.

US Oncology Reports 2000 Results

US Oncology, Inc. has announced results for the fourth quarter and twelve months ended December 31, 2000.

      Revenues for the fourth quarter increased 19% to $355.8 million from $299.5 million reported in the comparable quarter last year. Net income, excluding one-time charges, increased to $11.9 million, or $.12 per share, in the fourth quarter 2000 compared to $10.2 million, or $.10 per share, during the same period in 1999, an increase of 20%. Net loss, including one-time charges, was $123.3 million, or $(1.25) per share, compared to net income of $17.9 million, or $0.18 per share, in fourth quarter of 1999. During the quarter, US Oncology recorded $209 million in one-time charges, of which $201 million was non-cash, related to impairment of assets, restructuring of operations, additional bad-debt expense and cashless exercise of options.

      The fundamentals of USON's operations continue to be strong, demonstrated by the ``Adjusted EBITDA'' (EBITDA before corporate general and administrative costs and amounts retained by practices) increasing by 17% for the year, and 22% for the fourth quarter of 2000, compared to prior-year periods. During the same period, however, the Company's operating income, excluding one-time charges, did not grow, because under the Company's net revenue model service agreements, the Company disproportionately bears the impact of increasing operating costs. Currently, 51% of the Company's revenue is under the earnings model. To date, four practices have converted representing 9% of revenue. Back to TOC.

Community Health Systems Announces Year End Revenue Up 24%

The fiscal year ended December 31, 2000, generated $1.34 billion in net operating revenues and $252.7 million in adjusted EBITDA. They also achieved revenue growth of 23.8% in 2000 and 26.4% in 1999. The company also achieved growth in adjusted EBITDA of 23.8% in 2000 and 22.7%

      Community Health is an owner/operator of non-urban general hospitals and healthcare services. As of December 31, 2000, the company owned, leased or operated 52 hospitals, geographically diversified across 20 states, with an aggregate of 4,688 licensed beds. In over 85% of our markets, they are the sole providers of general hospital healthcare services and in most other markets, are one of two providers of general hospital healthcare services.