Contracting News January/February 2005

Catholic Health East joins Consorta
Newton Square, Pa.-based Catholic Health East (CHE) became Consorta’s (Schaumburg, Ill.) thirteenth shareholder. Consorta’s 13 shareholder systems now represent 60 percent of the Catholic acute care hospitals in the United States. CHE spends approximately $600 million per year on supplies and pharmaceuticals, and plans to utilize the custom contracting available through Consorta to leverage its system purchase volume and market share commitment with suppliers. CHE has 31 acute care hospitals and is the fourth-largest system when ranked by acute care beds. It is also the third-largest health system operating assisted living facilities, as ranked by the number of residents served.

Ochsner Health selects MedAssets
New Orleans’ Ochsner Health Care selected MedAssets Supply Chain Systems in Bridgeton, Mo., to implement supply chain and revenue cycle solutions. In addition, MedAssets will provide supply contract portfolio, custom catalog and strategic information technology. Through its business partner, Aspen Healthcare Metrics, MedAssets will focus on reduction of supply costs related to high-cost medical devices and pharmaceuticals. Oschner has a total annual supply spend of $130 million. The multi-year relationship was effective Jan. 1, 2005. UnitedHealthcare settles Medicare suit Minnetonka, Minn.-based UnitedHealth Group’s UnitedHealthcare Insurance Co. in Columbia, S.C., agreed to pay $3.5 million to settle charges that it defrauded Medicare. The charges claimed that from 1996 to 2000, UnitedHealthcare telephone representatives knowingly mishandled phone inquiries from Medicare beneficiaries and providers, and falsely reported its performance information. The company did not admit any of the allegations and said it reported the problems to the government and fixed them before the suit was filed. In a regulatory filing, UnitedHealthcare said it would reaffirm its financial expectations at a meeting with investors and analysts.

Amerinet contracts with Tyco Healthcare, Lanier, Nestle
Amerinet Inc. in St. Louis renewed an agreement with Tyco Healthcare Group in Mansfield, Mass., for electronic thermometry products. The renewed agreement extends the contract through Oct. 31, 2007. Amerinet signed a three-year renewal agreement with Lanier Worldwide Inc., located in Atlanta, for office equipment. Amerinet contracted with Nestle Foods/NESCAFE through Dec. 31, 2005. The contract represents an off-invoice discount on NESCAFE products purchased through the Amerinet prime vendor network.

Sutter Health’s CEO retires
Sacramento’s Sutter Health President and CEO Van Johnson will retire from his position after 10 years at the helm, effective June 1, 2005. The Sutter Health board of directors selected Patrick Fry, the system’s COO, to succeed Johnson. Following his retirement from Sutter Health, Johnson will embark on a new career with the Church of Jesus Christ of Latter-Day Saints in Salt Lake City, Utah.

Kindred Healthcare opens four hospitals
Kindred Healthcare Inc. in Louisville, Ky., announced the opening of four hospitals: Kindred Hospital-Dayton, Ohio, a freestanding, 67-bed LTAC facility; Kindred Hospital-St. Louis-St. Anthony’s, a 38-bed hospital-in-hospital (HIH) located within the campus of St. Anthony’s Medical Center in St. Louis; Kindred Hospital-Las Vegas at Desert Springs, a 40-bed HIH located within the Desert Springs Hospital Medical Center in Las Vegas; and Kindred Hospital New Jersey-Rahway, a 28-bed HIH located within Robert Wood Johnson University Hospital at Rahway, N.J. Kindred also plans to open a HIH within Munroe Regional Medical Center in Ocala, Fla., and within St. Michael Hospital in Oklahoma City.

Stryker wins Consorta contract
Consorta Inc. in Schaumburg, Ill., announced a three-year, sole-source contract with Stryker Instruments in Portage, Mich., for handheld powered instruments and cutting accessories used in joint, spine, neurology, ENT, trauma and small-bone orthopedic procedures. The contract was effective Nov. 1, 2004. The agreement gives Consorta members the opportunity to standardize surgical power tools to Stryker’s instruments, leading to operating room efficiencies and reducing the need to educate staff on multiple systems.

Tenet to sell home health agencies
Dallas, Texas-based Tenet Healthcare Corp. announced that several of its subsidiaries entered into a definitive agreement to sell four California home health agencies and an infusion center to CareSouth HomeCare Professionals in Augusta, Ga. The sale includes the home health agencies at Desert Regional Medical Center, Palm Springs, Calif.; Alvarado Hospital Medical Center, San Diego; Community Hospital of Los Gatos, Calif.; and Garden Grove Hospital & Medical Center, Garden Grove, Calif., as well as a related infusion center at Desert Regional. Net after-tax proceeds, including the liquidation of working capital, are estimated to be approximately $6 million. The sale is scheduled to be complete by Feb. 28, 2005.

Dade Behring works with Cleveland Clinic
Cleveland Clinic granted Dade Behring Corp. in Deerfield, Ill., certain semi-exclusive diagnostic rights for the commercialization of automated diagnostic tests using myeloperoxidase (MPO). Dade Behring is one of three companies selected to work with the system in commercializing MPO. Research performed at Cleveland Clinic indicates that MPO testing may be particularly beneficial in chest pain patients who exhibit low initial troponin(a) levels.

Premier signs contract with Diagnostic Products
Premier Inc. in San Diego signed a one-year contract with Diagnostic Products Corp. of Los Angeles for immunodiagnostic equipment and assays to perform various types of tests. The contract includes an option to renew for two years.

Mayo Foundation renews VHA membership
VHA Inc. in Irving, Texas, announced that Rochester, Minn.-based Mayo Foundation renewed its membership with VHA, signing a five-year agreement. The previous agreement began in 2000. Mayo will use VHA services to manage its supply chain expenses. Mayo is the biggest customer for VHA’s supply cost management program.

Bon Secours Health names new CEO
Bon Secours Health System in Marriottsville, Md., appointed Richard J. Statuto as president and CEO, effective Feb. 1, 2005. Statuto served for 17 years at Catholic Health Care System in New York, most recently as president and CEO at St. Joseph Health System in Orange, Calif. He replaces Christopher M. Carney upon his retirement. Bon Secours owns, manages or joint ventures 24 acute care, nine long-term care, eight assisted living and independent living and other facilities, primarily in the eastern United States.

LifePoint terminates deal with Health Management Associates
LifePoint Hospitals Inc. in Brentwood, Tenn., terminated an agreement with Naples, Fla.-based Health Management Associates. Terms of the agreement called for LifePoint to acquire from HMA 76-bed Williamson Memorial Hospital in Williamson, W.Va., and for HMA to acquire from LifePoint 56-bed Bartow Memorial Hospital in Bartow, Fla. No reason was given for LifePoint’s decision. LifePoint will continue its search for a buyer for Bartow Memorial.

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