LifePoint Chairman, CEO Fleetwood Dies of Heart Attack

LifePoint Hospitals Inc., which operates 21 hospitals in seven states, announced that Chairman and Chief Executive James Fleetwood, 54, died on June 2, of an apparent heart attack. This is the second CEO that the Company has lost to an early death.

      The Brentwood, Tenn.--based company said that DeWitt Ezell, former state president of Tennessee BellSouth Telecommunications, was elected by the board to serve as Interim Chairman in a non--executive capacity. Ezell also served as interim chairman when LifePoint's then--President and Chief Executive Scott Mercy died in an airplane accident in May, 2000.

      LifePoint said operations would proceed under a senior management team led by Chief Financial Officer Ken Donahey. Back to TOC.

Province Healthcare Company Announces the Signing of a Definitive Agreement

As of June 4, 2001, Province Healthcare Company has signed a definitive agreement to acquire Selma Baptist Hospital in Selma, Alabama, from Baptist Health of Montgomery, Alabama. The sale is expected to close during the second quarter of 2001. The hospital has 214 licensed beds and had annual revenues for its last fiscal year of approximately $36 million. Under the agreement, Province will acquire the assets and operations of Selma Baptist Hospital for approximately $31.0 million.

      Province Healthcare acquires and operates hospitals in non--urban markets in the US. PRHC operates 14 general acute care hospitals total of 1,358 beds, and manages 40 hospitals in 16 states with a total of 3,166 licensed beds. For the three months ended 3/01, revenues rose 12% to $122.4 million. Net income increased 63% to $8.5 million. Back to TOC.

AMA Back Away From Plans to Help Form Unions

According to Bruce Japsen of The Chicago, the American Medical Association's labor group said that it is backing off plans to launch new organizing efforts at the nation's private hospitals. This is a major setback for physicians who want to form unions.

      The move comes in the wake of a U.S. Supreme Court ruling last week that said nurses and other health-care workers at private hospitals cannot join labor unions if their duties include supervising others. The AMA's Physicians for Responsible Negotiation had viewed the nation's nearly 4,000 private hospitals as fertile ground for unions. Just two years ago, the National Labor Relations Board appeared to clear the way for residents employed by those institutions to bargain collectively.

      The AMA took the landmark step two years ago of forming a union, amid widespread physician complaints about a managed--care system they say shifts medical decision--making from health--care professionals to insurance administrators. At the same time, some medical residents embraced collective bargaining as a way to attain better work rules and other concessions from private hospital administrators who they say ignore their concerns. But the AMA on Wednesday highlighted the impediment posed by last week's decision, involving a Kentucky case where nurses at a private facility were excluded from bargaining because they supervised others.

      Representatives of the employers, meantime, also recognized the significance of the ruling. But hospitals see the decision as more ammunition for them to stop physicians from organizing.

      Up to now, the AMA organizing effort seemed to be gathering momentum, as increasing numbers of the nation's more than 500,000 self--employed physicians go to work for hospitals or clinics----often citing the financial pressure and paperwork demands imposed by managed--care and government insurers. A higher proportion of doctors entering the profession are employed by hospitals or others, too. Back to TOC.

Paracelsus Healthcare Amended Plan of Reorganization Confirmed

Paracelsus Healthcare Corporation announced that it has received oral confirmation from the United States Bankruptcy Court in Houston, Texas of its Chapter 11 Amended Plan of Reorganization and approval of the terms of its previously announced $5.5 million settlement of government claims. The plan of reorganization will become effective after entry of the final order by the court, expiration of the normal 10--day appeal period, and satisfaction of various conditions precedent to effectiveness contained in the Plan, which the Company expects to occur in the next few weeks. The Company continues to operate 10 facilities in the US. Back to TOC.

Coventry Health Care, Inc. to Acquire Additional HMO

Coventry Health Care, Inc. announced that its subsidiary, Group Health Plan (GHP) has reached an agreement with Aetna Inc. whereby GHP will act as the replacement carrier of Aetna's St. Louis area commercial HMO customers. Aetna's St. Louis area HMO members will be directly marketed to by GHP as Aetna winds down its HMO--based St. Louis area operations. The agreement with Aetna will be exclusive to GHP. Terms of the agreement were not disclosed.

      Coventry Health Care, Inc. is a managed health care company operating health plans under the names Coventry Health Care, Coventry Health and Life, HealthAmerica, HealthAssurance, HealthCare USA, Group Health Plan, SouthCare, Southern Health, Carelink Health Plans, and WellPath. The Company provides a full range of managed care products and services including health maintenance organization, point--of--service, preferred provider organization products, and Medicare and Medicaid products. The Company also administers self--insured plans for large employer groups. As of December 31, 2000, in continuing operations, the Company had 1,436,618 members for whom it assumes underwriting risk and 276,416 members of self--insured employers for whom it provides management services but does not assume underwriting risk.

      Coventry Health Care, Inc. is a managed health care company that provides health benefits and services to employer groups and government--funded groups in the Midwest, Mid--Atlantic and Southeastern US for the three months ended 3/31/01, total revenues rose 22% to $751.4 million. Net income before accounting change rose 58% to $18.6 million. Back to TOC.

HCA Building Habitat For Humanity Homes and Investing $1.3 Billion in Improvements

HCA has announced its "Build a Hospital -- Build a Home" program which will fund seven new Habitat for Humanity homes in communities across the country this year.

      Started in Idaho Falls, Idaho in May, the project was officially kicked off at Grand Strand Regional Medical Center in Myrtle Beach, S.C. by HCA Chairman Dr. Thomas F.Frist, Jr., and President and CEO Jack Bovender, Jr.

      Build a Hospital -- Build a Home will provide a home in communities where HCA is investing in a significant capital improvement project at a hospital and where there is a demonstrated housing need in the community. Hospital employees volunteer time to work on the homes and the HCA Foundation provides funding to underwrite the material and professional work required.

      In 2001 HCA expects to invest $1.3 billion in improvements and expansions at its existing hospitals. The company is scheduled to begin 38 capital improvements this year including new emergency departments; new and replacement facilities; additional acute care beds; and new and expanded services such as cardiology, cancer centers and women's health.

      Eastern Idaho Regional Medical Center, in Idaho Falls, was the first hospital to participate in the "Build a Hospital -- Build a Home" program. The hospital began its $42 million emergency room expansion, cancer center and cardiology area project in May and dedicated a Habitat for Humanity home today.

      The corporate office builds a Habitat home each year in the company's hometown, Nashville. Back to TOC.

In This Issue--Also See Archive

Heart Attack Claims LifePoint's Fleetwood

LifePoint Hospitals Inc., which operates 21 hospitals in seven states, announced that Chairman...

Province Healthcare to Acquire Hospital

As of June 4, 2001, Province Healthcare Company has signed a definitive agreement to acquire Selma Baptist...

AMA Nixes Union Plans

According to Bruce Japsen of The Chicago, the AMA's labor group said that it is backing off plans...

Paracelsus Reorganization Plan

Paracelsus Healthcare Corporation announced that it has received oral confirmation from the United States Bankruptcy...

GHP Picks Up Aetna Coverage

Coventry Health Care, Inc. announced that its subsidiary, Group Health Plan (GHP) has reached an agreement...

HCA $1.3 Billion Community Investment

HCA has announced its "Build a Hospital -- Build a Home" program which will fund seven new Habitat...

Magellan & Centerstone Resolve Dispute

Magellan Health Services and Centerstone Community Mental Health Centers announced the resolution...

Pediatrix Expands in Central Florida

Pediatrix Medical Group, Inc. increased its presence in the Central Florida area with the acquisition...

US Pncology Quarterly Report

The Company believes that the earnings model properly aligns practice priorities with proper cost control...

Immigration--House Extends Sec. 245(i)

The House on May 21 passed a limited extension of Section 245(i) by a vote of 336--43...

PhyCor Still Alive--But Barely

The biggest of the PPMs, PhyCor, Inc. has announced the results of its operations for the first quarter...

Magellan Health and Centerstone Community Mental Health Centers Resolve Dispute

Magellan Health Services and Centerstone Community Mental Health Centers announced the resolution of a contract dispute related to payment for services that Centerstone provided to members of the State of Tennessee's TennCare Partners Program. Terms of the settlement were not released. The dispute involved disagreements between Centerstone and Premier Behavioral Health Systems of Tennessee, LLC, of which Magellan is a 50% owner, over the payment methodology used to reimburse Centerstone for treating TennCare Partners members. Back to TOC.

Pediatrix Medical Expands in Central Florida with Neonatal Physician Group Acquisition

Pediatrix Medical Group, Inc. increased its presence in the Central Florida area with the acquisition of a physician group practice based in Winter Haven that provides care in a neonatal intensive care unit (NICU) and newborn nursery. The hospital--based physicians provide more than 6,000 annual patient care days, divided evenly between the NICU and the newborn nursery. With this transaction, Pediatrix has added more than 220,000 annual NICU patient days during 2001 through acquisition or internal growth, including the recently completed merger with Magella Healthcare Corporation, which added a total of 109 neonatal and maternal--fetal medicine physicians practicing in nine states. In addition, Pediatrix's perinatal subsidiary, Obstetrix Medical Group, Inc., expanded its presence in the Pacific Northwest with the acquisition of a maternal--fetal medicine physician group practice based in suburban Seattle. Financial terms were not disclosed. Back to TOC.

US Oncology Quarterly Reports

The Company believes that the earnings model properly aligns practice priorities with proper cost control, with the Company and the practice sharing proportionately in practice profitability. The Company is currently in the process of trying to reach agreement with those practices whose fees are calculated on the net revenue model to convert to the earnings model. During the first quarter of 2001, one practice accounting for 4.9% of 2000 net patient revenue converted to the earnings model. Effective since March 31, 2001, six practices accounting for 9.3% of net patient revenue in the first three months of 2001 have converted from the net revenue model to the earnings model. Back to TOC.

Immigration Bill Passes House with Limited Extension of Section 245(i)

The House on May 21 passed a limited extension of Section 245(i) by a vote of 336--43. H.R. 1885 would extend the Section 245(i) deadline for only four months, while also requiring beneficiaries to demonstrate that the required familial or employment relationship existed on or before April 30, 2001. (To become law, the Senate also must pass legislation that the President needs to sign.) Republican Congressional leaders refused to amend the measure to increase the extension period and eliminate the new requirement. The final measure that Congress passes needs to move closer to the bill introduced in the Senate, S. 778, by Senators Chuck Hagel (R--NE) and Edward Kennedy (D--MA) which extends the Section 245(i) deadline for one--year without the restriction in the House proposal.

      Employers or employees seeking more information should contact their immigration attorney. For more information, please contact Valerie Brodsky, Esq. at (757) 446--8600, via e--mail at vbrodsky@vanblk.com or visit her law firm website at www.vanblk.com. Back to TOC.

PhyCor Still Alive, Barely

The biggest of the PPMs, PhyCor, Inc. has announced the results of its operations for the first quarter ended March 31, 2001. The Company reported revenues of $85.3 million compared with $309.5 million for the same period in 2000. The net loss for the quarter was $20.1 million compared with a net loss of $25.6 million for the same quarter in 2000. The decline in revenues was primarily attributable to the sales of clinic assets that occurred in the last two quarters of 2000 and the first quarter of 2001. PhyCor no longer owns any clinic assets, although it does provide services to several clinics in its PhySys Division.

      In 2000, PhyCor lost $608.4 million in 2000--37% greater than the previous year's $444.5 million loss--despite continuing efforts to sell off underperforming assets. The company expects continued weak performance this year. "We do not believe our operating income will exceed our costs in 2001 and do not anticipate having access to any additional capital. Accordingly, we expect to continue to experience negative cash flow," the company says.

      Revenues slipped by nearly 40%, to $914.2 million from $1.52 billion, as PhyCor shed assets in a desperate attempt to remain solvent.

      The Company said that its largest asset, the California--based subsidiaries PrimeCare International, Inc, and PrimeCare Medical Network, Inc., reported revenues in the first quarter of 2001 of $61.1 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of $2.0 million compared with revenues of $49.4 million and EBITDA of $1.5 million in the first quarter of 2000. The increase in revenue is primarily the result of an increase in members enrolled in PrimeCare's health plans. As of March 31, 2001, PrimeCare Medical Network's tangible net equity was in excess of the amount required by the Knox--Keene Health Care Services Act of 1975. PrimeCare is in the business of managing independent practice associations in California.

      PrimeCare is complying with an agreement reached with the Department of Managed Health Care in the State of California whereby PrimeCare agreed not to make any distribution of cash to its parent or affiliates if such distribution would cause PrimeCare not to be in compliance with the financial requirements of the Knox--Keene Act. At March 31, 2001, PrimeCare had restricted cash reserves of $23.8 million.