Contracting News July/August 2007

UPMC notifies patients, employees of possible TB exposure
Pittsburgh, Pa.-based UPMC-Univ of Pittsburgh Medical Center notified 92 patients hospitalized in May 2007 at UPMC Presbyterian Campus (Pittsburgh) and UPMC Montefiore Campus (Pittsburgh), as well as 34 employees that they may have been exposed to tuberculosis from a lung transplant recipient. Those patients informed of the possible exposure included 25 who were immunosuppressed transplant patients. Those patients who are not transplant patients are being asked to undergo testing. According to UPMC, the strain is easily treated by all tuberculosis medications.

VHA hires senior VP for national supply chain services
Irving, Texas-based VHA Inc. appointed Jeff McLaren as senior VP for national supply chain services. In the newly created position, McLaren will direct the 10 VHA regional VP field team members who work with VHA hospitals on supply chain improvement. McLaren formerly served as a managing director of the health care and supply chain consulting practice at Huron Consulting Group. Prior to that he was a partner and the supply chain practice leader at CSC’s Global Health Solutions Consulting Practice from 2002 to 2005.

Sutter commits $1 million to statewide EMR initiative
Sacramento, Calif.-based Sutter Health gave a $1 million grant to the California Regional Health Information Organization (CalRHIO) to help it improve statewide access to electronic medical records, especially in rural areas. The grant also helps Sutter fulfill obligations made to state regulators earlier in 2007 as part of a broader commitment to pass along savings from tax-exempt bonds to healthcare consumers in return for regulators’ approval of a nearly $1 billion Sutter bond offering. As part of the application for the bond financing, Sutter agreed to invest an additional $8.5 million in technology grants to help rural hospitals connect to the electronic health technology infrastructure and to support community clinics in northern California.

Ascension calls Off Caritas Christi acquisition
Negotiations for Ascension Health’s (St. Louis) acquisition of Caritas Christi Health Care System (Boston) were called off. The agreement, which called for Ascension to assume Caritas Christi’s $278 million debt, was expected to take place in July 2007. The Boston Globe reported that sources close to the negotiations cited problems found in due diligence. These problems include an underfunded pension fund, an eroding chain of referrals to its hospitals, and a serious decline in patient volume. Further details were not disclosed.

Medison appoints Steven Morris to national account manager, company enters global national accounts
Cypress, Calif.-based Medison America, Inc. announced its entry into the global national accounts sector of healthcare with its appointment of Steven Morris as national account manager for North America. Morris will be based out of the corporate office and will be focused on developing new business within the government, GPO, IDN/IHN, and imaging group market segments. He will report directly to the President/CEO, Patrick Shin. Morris has 28 years of experience in an array of healthcare divisions comprised of emergency medicine, medical/surgical manufacturing and distribution, and national accounts within the surgery center and surgical hospital market segments. His “Call Point” experience includes alternate site, acute care, GPO’s, IDN/IHN sectors, regional and national surgery centers, and surgical hospital groups throughout the country. He previously served as national account manager with Cardinal Health, and helped pioneer a surgery center and surgical hospital initiative. Medison is a 22-year old global diagnostic ultrasound manufacturer with its global headquarters located in Seoul, Korea.

Catholic Health Initiatives eyes Colorado site
Catholic Health Initiatives (CHI) (Denver) is considering relocating St Anthony Central Hospital (Denver) to 65 acres of the Denver Federal Center in Lakewood, Colo. Lakewood officials approved a plan which would turn over the land to the health system; however, the plan must first be reviewed and approved by the U.S. General Services Administration (Washington, D.C.). In addition to the hospital, part of the land will be used to build a transit center. CHI’s share is estimated at $19.25 million. The price will be paid primarily in cash, although there will be credits and offsets for work needed at the site including updating sewer and water lines and environmental cleanup. Officials estimate the deal could close as early as August 2007 or September 2007. CHI plans on building a $500 million seven-story hospital with 300 beds on the site. The hospital is expected to open in late 2009 or early 2010.

Baylor Grapevine names new president
T. Douglas Lawson was named new president at Baylor Regional Medical Center at Grapevine (Grapevine, Texas), effective Aug. 20, 2007. He most recently served as senior VP and COO at Cabell Huntington Hospital (Huntington, W.V.). Lawson will succeed Sandy Aaron, who has held the interim post since 2006.

Premier recognizes Ricoh Corp.
San Diego-based Premier Inc. recognized West Caldwell, N.J.-based Ricoh Corp. as a winner of the 2007 Pinnacle Award for supplier performance that meets and exceeds the expectations of Premier and its members. The award is based on performance data collected during the year and shared with contracted suppliers through the Premier business line review process.

Edward Hospital announces $100 million renovation
Naperville, Ill.-based Edward Hospital & Health Services plans a $100 million, five-year renovation to Edward Hospital (Naperville, Ill.). The project includes renovations to the surgical services department, the addition two stories to the West Building for more room for the natal unit, and a 3,200-square foot addition to the fitness center. Work will be completed in 2010.

Tenet completes sale of two Philly-area hospitals to Solis
Dallas-based Tenet Healthcare Corp. has completed the sale of Philadelphia-based Roxborough Memorial Hospital and Warminster, Pa.-based Warminster Hospital to Philadelphia-based Solis Healthcare LLC for $25.5 million. The payment is structured as $15.5 million in cash, which will be used for general corporate purposes, and a $10 million note due in December 2009.

HealthSouth sells Surgery Division
Birmingham, Ala.-based HealthSouth Corp. closed its previously announced sale of its surgery division to TPG, a private investment firm, for roughly $945 million in June. The division is now called Surgical Care Affiliates, a stand-alone surgical services company comprised of a network of 137 outpatient surgery centers and three surgical hospitals. The bulk of the facilities are located in the states of California, Texas, Florida, North Carolina and Alabama. HealthSouth had previously planned to spin-off the surgical division in 2002 as a public company and call it Surgical Care Affiliates, but the plan was cancelled due to market conditions. The deal allows HealthSouth to pay down debt and focus on its inpatient rehab division.

»» CORRECTION
In the May/June 2007 article “An End to Overtime” of the Journal of Healthcare Contracting, Todd Hansen was incorrectly listed as being a part of Brentwood, Tenn.-based HealthTrust Purchasing Group. Hansen works for Campbell, Calif.-based The Health Trust, no relation to HPG. The sidebar was meant to profile an HPG executive member. JHC regrets the error.

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