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Ardent Health to Acquire KY Hospital
Ardent Health Services of Nashville, Tenn. (formerly Behavioral Healthcare
Corp) announced that it has signed a definitive agreement to purchase Samaritan
Hospital in Lexington, Ky. Samaritan Would Be Ardent's Second Medical/Surgical
Hospital Purchase Since Announcing Plans to Expand Company Beyond Behavioral
Health Services
Ardent is purchasing the 336-bed hospital
from Nashville-based HCA. Samaritan is the second medical/surgical hospital
to be purchased this year by Ardent. The company purchased 201-bed Summit
Hospital in Baton Rouge, La., in August.
Samaritan Hospital opened in 1888, and
serves the Lexington-Fayette County area and its surrounding Central Kentucky
counties. The area has experienced significant growth in recent years, surpassing
the national growth average by nearly five percent during years 1990 to 2000.
Nashville, Tenn.-based Ardent Health
Services is a provider of health care services to communities throughout
the United States. In May, 2001, Welsh, Carson Anderson and Stowe, one of
the country's largest private equity firms, became a majority owner of Behavioral
Healthcare Corporation and re-named the company Ardent Health Services to
reflect the expansion into medical/surgical hospitals. Ardent currently owns
21 free-standing pyschiatric and 2 acute care hospitals in 11 states, providing
a full range of medical/surgical, psychiatric and substance abuse services
to patients ranging from children to adults. Back to
TOC
LifePoint Hospitals, Inc. announced that it has completed, effective December
1, 2001, the purchase of Ville Platte Medical Center, a 116-bed acute care
facility located in Ville Platte, Louisiana, and serving Evangeline Parish
and South Central Louisiana.
Kenneth C. Donahey, chairman and chief
executive officer of LifePoint Hospitals, said, "We are excited to complete
this acquisition. The Ville Platte community and medical staff have been
tremendously supportive throughout this process. We look forward to working
closely with the medical staff, employees and community to support the healthcare
needs of Ville Platte and Evangeline Parish."
LifePoint Hospitals, Inc. operates 23
hospitals in non-urban areas. In most cases, the LifePoint facility is the
only hospital in its community. LifePoint's non-urban operating strategy
offers continued operational improvement by focusing on its five core values:
delivering high quality patient care, supporting physicians, creating excellent
workplaces for its employees, providing community value, and ensuring fiscal
responsibility. Headquartered in Brentwood, Tennessee, LifePoint Hospitals
is affiliated with over 6,000 employees. Back to TOC
Profits of the nation's life and health insurers declined $6 billion, or
42 percent, during the first six months of 2001, compared to the same period
in 2000, according to Weiss Ratings, Inc., the only provider of independent
insurance company ratings and analyses.
Meanwhile, the industry's return on assets
fell 44 percent to 0.51 percent, and its return on equity fell 45 percent
to 7.3 percent, with the latter falling below 10 percent for the first time
since 1995. The profit declines are primarily due to a $2.2 billion capital
loss on the sale of invested assets as well as a $3.1 billion decline in
overall operating profits.
"All of these declines took place in
the first and second quarters of the year, long before the September 11 events,
and they began well before the onset of the recession, now officially pegged
to March," commented Martin D. Weiss, Ph.D., chairman of Weiss Ratings, Inc.
"With the recession deepening in the second half and continuing into 2002,
more profit declines are very likely as consumers delay the purchase of
insurance, frequently viewed as a non-essential item."
In addition, insurers selling fixed annuities
face a double threat: First, with rapidly falling interest rates, income
on their investment portfolios may have fallen below the rates they have
committed to pay to policyholders. At the same time, junk bonds, one of the
industry's favorite vehicles for generating more yield in this environment,
have exposed insurers to increasing defaults. Back to
TOC
Among the 980 companies reviewed by Weiss using second quarter 2001 data,
7 were upgraded and 13 were downgraded.
Notable upgrades include:
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Savings Bank Life Insurance Company (Conn.) from D+ to C-
Notable downgrades include:
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Scottish Re US Inc (Del) from C- to D+
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American Life & Annuity Ins Co (Texas) from C to D
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OakRe Life Ins Co (Mo.) from B- to C
Weiss issues safety ratings on more than 15,000 financial institutions, including
life and health insurers, HMOs, Blue Cross Blue Shield plans, property and
casualty insurers, banks, and brokers, and the risk-adjusted performance
of more than 11,000 mutual funds. Back to TOC
Health Management Associates, Inc. announced it has completed the transaction
to acquire the East Pointe Hospital, an 88-bed acute care hospital located
in Lehigh Acres, Florida, effective November 30, 2001. This is the first
acquisition of fiscal year 2002.
East Pointe Hospital is HMA's twelfth
Florida hospital, and joins our Top 100 Charlotte Regional Medical Center
in Punta Gorda, Florida, in providing high quality medical services to non-urban
areas of Southwest Florida.
HMA is a hospital operator of general
acute care hospitals in communities situated primarily in the Southeast and
Southwest. The Company, upon completing the previously announced transaction
to acquire four hospitals from the Clarent Hospital Corporation, will operate
43 hospitals in 15 states with 5,913 licensed beds. HMA has experienced 13
years of uninterrupted operating earnings growth. Back to
TOC
Correctional Properties Trust, a real estate investment trust (REIT), announced
funds from operations for the three months ended September 30, 2001, of $4.1
million, or $0.57 per diluted share, on revenue of $7.5 million. Net income
for the third quarter of 2001 was $2.3 million or $0.32 per diluted share.
The Trust reported funds from operations of $3.4 million for the third quarter
of 2000, or $0.47 per diluted share, on revenue of $5.7 million. Net income
for the third quarter of 2000 was $2.0 million or $0.29 per diluted share.
Correctional Properties Trust also announced
that its Board of Trustees increased the quarterly dividend to $0.375 (thirty
seven and one half cents) per share on each common share of beneficial interest,
payable December 4, 2001, to shareholders of record at the close of business
November 16, 2001.
Correctional Properties Trust, based
in Palm Beach Gardens, Florida, was formed in February 1998, to capitalize
on the growing trend toward privatization in the corrections industry.
Correctional Properties Trust is dedicated to ownership of correctional
facilities under long-term, triple-net leases without occupancy risk or
development risk.
Correctional Properties Trust currently
owns 13 correctional facilities in nine states, all of which are leased,
with an aggregate initial design capacity of 7,282 beds. Back
to TOC
Cornell Companies sale, which included the sale of an over-allotment of 450,000
shares, eliminates all of Cornell's balance sheet debt and leaves approximately
$50 million of cash, creating a stronger position to capitalize on opportunities
for expansion. Presently, there are a number of projects coming up for bid
in the corrections industry and Cornell will be well positioned tocapitalize
on these opportunities.
Cornell Companies is another provider
of privatized correctional, treatment and educational services outsourced
by federal, state and local government agencies. Cornell Companies provides
a diversified portfolio of services for adults and juveniles related to
incarceration and detention, transition from incarceration, drug and alcohol
treatment programs, behavioral rehabilitation and treatment and K-12 education.
Cornell Companies provides these essential services through its 69 facilities
in 13 states and the District of Columbia. Back to
TOC
Healthy third-quarter profits show most U.S. managed care companies remain
a step ahead of rising medical costs, but a slowing economy will make ittougher
for insurers to raise premiums and grow enrollment going forward, analysts
said.
"It's the one sector of health care that
is most affected by the weakening economy," said Banc of America Securities
analyst Todd Richter. "A weakening economy means rising unemployment, which
means more people uninsured, which means less enrollees."
Two large health plans, Health Net Inc.
(NYSE:HNT - news) of Los Angeles and Trigon Healthcare Inc. (NYSE:TGH - news)
in Richmond,Virginia, on Friday reported sharp declines in third-quarter
income after charges.
Health Net, with 5.5 million members
in 13 states, said net income fell to $2.3 million, from $44.6 million a
year ago, after a $79.7 million restructuringcharge for job cuts.
Trigon, Virginia's largest health insurer,
said net income fell nearly 54 percent as weak financial markets hurt the
company's investments.
Health Net and Trigon were the last of
the major publicly traded health maintenance organizationsto report their
third-quarter results, with the exception of Anthem Inc. (NYSE:ATH - news),
which went public on October 30 in a $1.73 billion offering. Anthem will
report earnings on Wednesday. Back to TOC
Most HMOs this year negotiated hikes in the premiums paid by employers that
outpaced increases in costs for physicians, hospitals and pharmaceutical
services.
The cost of large employers' health benefit
plans will increase about 14 percent on average in 2002, the highest
year-over-year rise in more than a decade, according to a survey released
this week by consulting firm Towers Perrin.
Higher premiums resulted in solid profit
growth for most managed care companies in the latest quarter that largely
met or beat Wall Street forecasts.
WellPoint Health Networks Inc. (NYSE:WLP
- news), UnitedHealth Group Inc. (NYSE:UNH - news), Humana Inc. (NYSE:HUM
- news), Coventry Health Care Inc. (NYSE:CVH - news) and PacifiCare Health
Systems Inc. (NasdaqNM:PHSY - news) all reported operating profits in excess
of 20 percent.
Cigna Corp., the third-largest HMO, reported
lower earnings, but the decline was smaller than analysts had expected.
Only one major health insurer, Aetna
Inc. (NYSE:AET - news), recorded a loss in the third quarter. Aetna, the
largest managed care company, said it lost $54.4 million as it continued
to pare membership in unprofitable government-sponsored plans.
However, with the economic downturn reversing
the fortunes of companies across a wide swath of industries, from technology
tomanufacturing to financial services, managed care providers will be
hard-pressed to match the rate increases that have helped provide tidy profits
this year, analysts said. Back to TOC
"We think employers will push back, they will want to buy cheaper products.
We think margins in the industry, which are already at peak levels, must
turn down in '02," said Credit Suisse First Boston analyst Joseph France.
Trigon Chief Executive Thomas Snead said
most of Trigon's customers have been purchasing the company's benefit-rich
plans, but more will switch to lower-cost plans with fewer frills as medical
expenses continue to rise."New cost-sharing products are beginning to sell
quite well," Snead said in an interview.
The Standard and Poor's Managed Care
Index (^SPHMO - news) is down about 17 percent year to date. The index has
slumped 4.5 percent over the past three days after Aetna posted its loss.
While concerns about earnings growth
in the second half of 2002 have dampened investor enthusiasm for the managed
care sector as a whole, some companies will continue to produce results that
outshine their peers, analysts said.
Employers are considering a number of
measures to control rising health expenses, including passing on more of
the costs to employees in the form of higher monthly contributions, deductibles
and co-payments, according to Towers Perrin. Fueling the increased medical
costs are higher costs of prescription drugs and hospital services.
Escalating medical costs have been a
persistent challenge for the HMO industry, prompting premium hikes and service
cutbacks for consumers and forcing numerous smaller and less profitable plans
to dissolve or merge in recent years. Back to TOC
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Ardent Health to Acquire KY Hospital
-
Ardent Health Services of Nashville, Tenn. announced that it has signed a
definitive agreement to purchase Samaritan Hospital in Lexington, Ky. Samar...
-
LifePoint Acquires Ville Platte
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LifePoint Hospitals, Inc. announced that it has completed, effective December
1, 2001, the purchase of Ville Platte Medical Center, a 116-bed acute ca...
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Life & Health Insurers Down 42%
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Profits of the nation's life and health insurers declined $6 billion, or
42 percent, during the first six months of 2001, compared to the sa...
-
Notable Upgrades and Downgrades
-
Among the 980 companies reviewed by Weiss using second quarter 2001 data,
7 were upgraded and 13 were downgraded. Notable upgrades inc...
-
HMA, Inc. Acquires Acute Care in Florida
-
Health Management Associates, Inc. announced it has completed the transaction
to acquire the East Pointe Hospital, an 88-bed acute care hospital locat...
-
Correctional Properties Trust Reports Growth
-
Correctional Properties Trust, a real estate investment trust (REIT), announced
funds from operations for the three months ended September 30, 2001, o...
-
Cornell Companies Raises $48.3 Million
-
Cornell Companies sale, which included the sale of an over-allotment of 450,000
shares, eliminates all of Cornell's balance sheet debt and leaves app...
-
ManagedCare Up, but Future Cloudy
-
Healthy third-quarter profits show most U.S. managed care companies remain
a step ahead of rising medical costs, but a slowing economy will make ittou...
-
HMO Premiums Outpace Health Costs
-
Most HMOs this year negotiated hikes in the premiums paid by employers that
outpaced increases in costs for physicians, hospitals and pharmaceutical
s...
-
Employees to Pay More
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"We think employers will push back, they will want to buy cheaper products.
We think margins in the industry, which are already at peak levels, must
t...
-
LifePoint Q3 Earnings Up 66.7%
-
Third Quarter Highlights: Continuing strong financial performance Quarterly
EPS of $0.20 compared with $0.12 in the prior year (excl...
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Health Costs Rising in 2002
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With the economy reeling from terrorist attacks and a prolonged slowdown,
both employers and employees are bracing for higher health insurance costs.
-
Tenet Completes $1.1 Billion Tender
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Tenet Healthcare Corporation has announced that it has successfully completed
its offer to purchase five series of its senior notes. The company's ca...
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WellPoint Creates Hurdle For Trigon
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WellPoint Health Networks Inc. $1.3 billion proposed purchase of CareFirst
will make Trigon Healthcare Inc.'s ambition to become a leading Southeaste...
Third Quarter Highlights:
Continuing strong financial performance Quarterly EPS of $0.20 compared with
$0.12 in the prior year (excluding $0.02 non-recurring gain) EBITDA margin
increased to 20.3%, a 170bp increase over prior year Increase in same-hospital
admissions of 6.5% Increase in same-hospital equivalent admissions of 6.0%
Signed definitive agreement to acquire 116-bed Ville Platte Medical Center
Completed acquisition of 118-bed Athens Regional Medical Center effective
October 1.
LifePoint Hospitals, Inc. (NASDAQ:LPNT
- news) today announced results for the third quarter and nine months ended
September 30, 2001.
For the quarter ended September 30, 2001,
net revenues were $149.2 million, up 2.7% from $145.3 million a year ago.
Net income for the quarter totaled $7.5 million, or $0.20 per diluted share,
versus $4.8 million, or $0.14 per diluted share, in the prior-year period,
representing increases of 56.9% and 42.9%, respectively. Excluding the
non-recurring gain (related to the gain on previously impaired assets) in
the prior year period, diluted earnings per share increased 66.7% to $0.20
from $0.12 in the prior year. Shares used in calculating diluted earnings
per share for the third quarter of 2001 included 3.7 million additional shares
compared with the third quarter of 2000 as a result of the secondary offering
of common stock completed in March 2001. Earnings before interest, income
taxes, depreciation, amortization, ESOP expense, minority interest and gain
on previously impaired assets (EBITDA) increased 12.1% to $30.3 million from
$27.0 million in the same period last year.
For the nine months ended September 30,
2001, net revenues were $455.1 million, up 9.8% from $414.6 million a year
ago. Net income for the nine-month period totaled $23.0 million, or $0.63
per diluted share, versus $12.5 million, or $0.38 per diluted share, in the
prior-year period, representing increases of 84.2% and 65.8%, respectively.
Excluding the extraordinary item and the nonrecurring gain, diluted earnings
per share increased 83.3% to $0.66 from $0.36 in the prior year. Earnings
before interest, income taxes, depreciation, amortization, ESOP expense,
minority interest, gain on previously impaired assets and extraordinary loss
(EBITDA) increased 26.3% to $96.1 million from $76.1million in the same period
last year.
During the third quarter, the Company
announced the signing of a definitive agreement to acquire 116-bed Ville
Platte Medical Center in Ville Platte, Louisiana. This acquisition is expected
to close during the fourth quarter. In addition, the Company completed the
acquisition of 118-bed Athens Regional Medical Center, located in Athens,
Tennessee, effective October 1. Both acquisitions will be funded with available
cash.
Kenneth C. Donahey, chairman and chief
executive officer of LifePoint Hospitals, said, "We are pleased that once
again we have exceeded expectations. Improving EBITDA margins reflect our
success at generating internal growth through cost controls, expanding services
and recruiting physicians. During the quarter, we also announced two
acquisitions. Our ability to fund these acquisitions with available cash
continues to demonstrate our fiscal discipline. In addition to our solid
financial performance, we are proud to continue providing quality healthcare
in the communities we serve. Combined, these accomplishments solidly position
us to reach our immediate and long-term objectives."
LifePoint Hospitals, Inc. operates 22
hospitals in non-urban areas. In most cases, the LifePoint facility is the
only hospital in its community. LifePoint's non-urban operating strategy
offers continued operational improvement by focusing on its five core values:
delivering high quality patient care, supporting physicians, creating excellent
workplaces for its employees, providing community value, and ensuring fiscal
responsibility. Headquartered in Brentwood, Tennessee, LifePoint Hospitals
is affiliated with over 6,000 employees. Back to TOC
With the economy reeling from terrorist attacks and a prolonged slowdown,
both employers and employees are bracing for higher health insurance costs.
Premiums are expected to rise an average 13.6 percent next year, and that
doesn't even reflect the increases expected from the threat of terrorism,
such as the sudden flood of anthrax testing and treatment.
Although employers are entering open
enrollment season in December and January, the rates and options now being
offered for health care plans were negotiated early in 2001, well before
the terrorist attacks and even before the economy started sliding into recession.
"Where we'll see the effect from Sept.
11 is a year from now," says Helen Darling, president of the Washington Business
Group on Health, which represents some of the region's largest employers.
"We're getting an accidental free ride this coming year, but it's really
going to just explode after that."
Even though rates are going up in the
next month or two, those increases are "based on last year's reality," Darling
says. Caps and cutbacks Next year, each employee hired will cost employers
an average $5,500 to $7,000 in health premium costs, according to the Business
Group. "That's why so many small businesses don't offer health plans -- it's
extraordinarily expensive," Darling says. "The way we're going about this,
we're making health care about as unaffordable as it can be."
If the Patient's Bill of Rights, now
in conference committee in Congress, is passed it would add another 1 to
2 percent to premium costs, Darling says. "Everything they are doing is just
adding on. It's all going up." Going into 2002, hot and cold industries will
transfer their fortunes to health care, she says. "The security industry
will probably enrich their health care plans, while hotels will probably
cut theirs back," Darling says. "Employers are looking at different ways
to cap their exposure to rising health care costs," says Gregg Lehman, president
of the National Business Coalition on Health. For example, companies are:
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Increasing the payment or deductible employees must pay;
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Focusing on high-risk populations, such as diabetics or those with high blood
pressure, to contain runaway expenses;
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Restructuring prescription medicine coverage to encourage use of generic
equivalents and tiered levels of co-payments.
Workers who are laid off theoretically can keep their former company's health
coverage -- if they pay 100 percent of the costs.
Federal Cobra legislation requires employers
to offer employees the chance to stay on their health plan for up to 18 months
after termination. Even at some of the group rates, Cobra coverage is very
expensive -- as much as $700 to $900 a month. "That's a pretty tough nut
to get past," says Ray Werntz, president of the Consumer Health Education
Council.
Cobra coverage also can be quite expensive
for the employers, because the former employees who opt for extended coverage
are usually the ones who need it most -- and are more likely to need
hospitalization or treatment. Back to TOC
Tenet Healthcare Corporation has announced that it has successfully completed
its offer to purchase five series of its senior notes. The company's cash
tender offer and related consent solicitation commenced on Oct. 31, 2001
and expired at 5:00 p.m. EST on Thurs. Nov. 29, 2001, the expiration time.
As of the expiration time, the following
amounts of the company's senior notes had been validly tendered:
$194,361,000 principal amount of its
7-7/8% Senior Notes due Jan. 15, 2003, representing 97.0% of the outstanding
notes, leaving $6,103,000 principal amount outstanding;
$212,254,000 principal amount of its
8-5/8% Senior Notes due Dec. 1, 2003, representing 93.1% of the outstanding
notes, leaving $15,724,500 principal amount outstanding;
$383,672,000 principal amount of its
8% Senior Notes due Jan. 15, 2005, representing 94.6% of the outstanding
notes, leaving $21,957,000 principal amount outstanding;
$157,465,000 principal amount of its
7-5/8% Senior Notes due June 1, 2008, representing 99.9% of the outstanding
notes, leaving $225,000 principal amount outstanding; and
$99,200,000 principal amount of its 9-1/4%
Senior Notes due Sept. 1, 2010, representing 99.7% of the outstanding notes,
leaving $250,000 principal amount outstanding.
The company accepted all notes validly
tendered prior to the expiration time. Settlement for the company's purchase
is expected to occur today.
As previously announced, the company
will record an extraordinary charge in the second quarter related to the
early extinguishment of debt. The company expects that charge to be approximately
$103 million.
In addition, prior to 5:00 p.m. EST on
Nov. 14, 2001, the company received requisite consents to the proposed amendments
of the respective indentures under which the notes were issued. Supplemental
indentures reflecting the amendments were executed promptly after such receipt
and the amendments became effective as of today. The amendments eliminated
or modified substantially all of the covenants in the indentures governing
the notes so that they conform to the covenants in the indenture governing
Tenet's senior unsecured notes issued Nov. 6, 2001.
Tenet Healthcare Corporation owns and
operates 114 acute care hospitals with 28,256 beds and numerous related health
care services. The company employs approximately 111,500 people serving
communities in 17 states Back to TOC
WellPoint Health Networks Inc. $1.3 billion proposed purchase of CareFirst
will make Trigon Healthcare Inc.'s ambition to become a leading Southeastern
health plan leader more difficult, as the price of poker just went up!
WellPoint agreed to buy CareFirst, a
nonprofit Blue Cross/Blue Shield operator in Delaware, Maryland, Washington
D.C., and Northern Virginia serving 3.1 million members.
Trigon is Virginia's largest provider
with 2 million people covered under its plans and has expressed a desire
to buy other BlueCross/Blue Shield operators.
Thousand Oaks, California-based WellPoint,
however, is taking away what was a potential partner for Trigon, which covers
the area adjacent to CareFirst. WellPoint also already owns Cerulean, the
Blue Cross/Blue Shield operator in Georgia.
"Trigon is in a tough place and this
deal makes it even in a tougher place," Prudential Securities analyst David
Shove said. He said Trigon may need to make a rival bid for CareFirst or
buy another firm in the Southeast to expand.
Brooke Taylor, vice president for corporate
communications at Trigon, said there are no plans to make a bid for CareFirst
and that the company continues to have a regional strategy. "In the next
several years, we think our significant competitive advantage provides us
with opportunities for growth here (in Virginia) and also toward the
establishment of a strong regional health plan," Taylor said. Taylor declined
to say where the company would make an acquisition, but she said a regional
approach to managed health care is the best approach.
UBS Warburg analyst said WellPoint's
deal is a "wake-up call" to Trigon and could renew pressure to buy a company
outside Virginia, McKeever said. "The game is late, but it is not over,"
McKeever said about acquisitions among Blue Cross/Blue Shield providers.
Trigon has opportunities to expand into the Carolinas or to other portions
of the Southeast to fulfill its goal of becoming the leading regional health
plan, he said.
Trigon shares fell 56 cents to $64.74,
while Mid Atlantic Medical Services Inc. (NYSE:MME - news), a CareFirst rival
that is not a Blue Cross/Blue Shield plan, rose 54 cents to $20.68. Mid Atlantic
Medical insures 1.8 million people in Maryland, Washington, D.C., Delaware,
North Carolina, Pennsylvania, and West Virginia. McKeever said in a research
note that the deal puts Mid Atlantic at a slight disadvantage, but the company
may be able to get higher prices for its plans in Maryland and also gain
enrollment from employers over uncertainty from the merger.
Back to TOC
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