HCA, Tenet Healthcare, CMS, Abbott Labs, I-Stat, TheraSense

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UNINSURED PATIENT HOSPITAL CHARGES REDUCED AT HCA & TENET

For-profit hospital ompanies moved swiftly to announce and publicize new policies for billing uninsured patients. These patients will see charges reduced to levels that are closer to what hospitals accept from HMOs and Medicare/Medicaid.

HCA, which operates 166 acute care hospitals, disclosed in its 2003 year-end financial report that it implemented a “charity care and financial discount policy to provide financial relief to more of its charity patients and needs-based discounts for uninsured patients who receive non-elective care at its hospitals.” HCA disclosed that “charity care and related discounts” amounted to $821 million in 2003, compared to $579 million in 2002.

Tenet Healthcare Corp., which operates 114 domestic general hospitals, announced on March 3, 2004, that it was implementing discounts to uninsured patients in a five-point program it calls the “Compact With Uninsured Patients.”

During the past year, consumer advocates and the Wall Street Journal have publicized the fact that many hospitals charge uninsured patients at a rate which is significantly higher than the reimbursement they accept from HMOs and Medicare/Medicaid. Moreover, some hospitals have policies which include collection suits, attachments, and even more aggressive collection tactics.

It was concerns about such practices at a not-for-profit hospital in Champaign, Illinois that caused local and state tax officials to void the hospitals tax-exempt status last month. (See TDR, February 23, 2003.)

In late February, the Centers for Medicare and Medicaid Services (CMS) issued a detailed ruling letter which declared that nothing in federal rules prohibited hospitals from extending discounted prices to uninsured patients. CMS pointedly hand-delivered the letter and a six page question and answer document to the offices of the American Hospital Association in Chicago.

ABBOTT MOVES FORWARD WITH ITS POC ACQUISITIONS

IN THE SPACE OF TWO MONTHS, Abbott Laboratories, Inc. announced the acquisition of two point-of-care testing (POCT) companies.

In December, it agreed to purchase I-Stat Corporation for $392 million. That transaction closed on January 28, 2004. (See TDR, December 22, 2003.)

In January, Abbott entered into a deal to acquire TheraSense, Inc. Abbott will pay $1.2 billion to purchase the company, which markets a self-monitoring blood glucose system. On February 24, the proposed acquisition cleared anti- trust review and is expected to close in the second quarter of 2004.

Both I-Stat and TheraSense pioneered point-of-care testing systems that found growing acceptance in the marketplace. Abbott’s willingness to spend $1.6 billion to purchase both companies shows it believes the POCT market will grow much more rapidly than the market for core lab tests.

Abbott received more good news during the month of February. The FDA approved 11 assays for hepatitis, PSA, and AFP. This approval is an additional sign that the expensive, multi-year feud between Abbott and the FDA has ended.

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