COLUMBIA/HCA GETS NEW NAME; ACQUIRES FOUR LONDON HOSPITALS
NOW THAT IT HAS A SETTLEMENT with the federal government on civil claims of Medicare fraud, expect a rapid cascade of changes at Columbia/HCA Healthcare Corporation, the nation’s largest for-profit hospital company.
First is a new name. Effective on May 25, Columbia/HCA is now called HCA-The Healthcare Company (HCA). Its stock symbol becomes “HCA” on May 30. This is clearly a move to distance the company from many negative perceptions which accrued during the ten years between 1987 and 1997 when former CEO Rick Scott transformed a two-hospital enterprise into a $20 billion healthcare behemoth.
Second, HCA announced on May 19 that it had acquired full ownership of four hospitals in London, England. It did so by purchasing the 50% interest of its joint venture partner for $110 million. Collectively, the four hospitals represent about 600 beds, and are recognized as among the leading private hospitals in England.
THE DARK REPORT has predicted that the larger healthcare corporations will begin to develop international operations. Examples are Quest Diagnostics Incorporated’s Nichols Institute activities in Brazil and the University of Pittsburgh Medical Center’s new hospital and transplant center in Italy.
HCA’s expansion of its assets in England is one indication that the company believes that private healthcare providers will play a larger role within the British Isles in coming years. In Canada’s single payer health system, some provinces are now actively encouraging the development of privately-owned and operated healthcare services. There is growing recognition that the single-payer systems of Great Britain and Canada have specific problems that can best be solved through private healthcare service providers.
Prior to its problems with Medicare Fraud and Abuse issues, HCA was aggressively reshaping the form and structure of its hospital-based laboratories. Now that most Medicare fraud issues are settled, HCA will certainly put more management attention into the way its laboratory services are organized and delivered.
AMERIPATH ANNOUNCES FINANCIAL PERFORMANCE FOR FIRST QUARTER
Strong revenue gains for the first quarter were posted by AmeriPath, Inc., based in Riviera Beach, Florida. AmeriPath is the only public pathology PPM in the United States.
Net revenue totaled $68.2 million for the quarter. This was a 30% increase over Q1-99’s net revenue of $52.3 million. Net income increased by 17.3%, from $5.2 million to $6.1 million.
AmeriPath’s new laboratory in New York City posted revenues of $4 million during its first nine months of operations. The company also projects that its anatomic pathology Center for Advanced Diagnostics (CAD) will be open by the end of June. This new 10,000 square foot facility is located in Orlando and will be AmeriPath’s national center of excellence.
On May 15, AmeriPath also announced the acquisition of Chappell-Joyce Pathology Association in Texarkana, Texas. This acquisition complements the company’s operations in Dallas. It extends AmeriPath’s anatomic pathology capabilities in that regional market.
EPITOPE TO MERGE WITH STC TECHNOLOGIES AND GET A NEW NAME
IT’S A MARRIAGE of emerging diagnostic technology capabilities. Epitope, Inc. of Beaverton, Oregon will merge with STC Technologies, Inc. of Bethlehem, Pennsylvania.
The combined company will be called OraSure Technologies, Inc. and will be headquartered in Bethlehem, Pennsylvania. It will have annual revenues of approximately $26 million. The agreement is subject to shareholder votes and the merger will not take place until this fall.
Epitope developed an oral fluid assay for HIV called OraSure®. It has become the primary HIV screening test for a number of prominent AIDS clinics in the United States.
STC Technologies developed Up- Converting Phosphor Technology™ (UPT). This technology “utilizes sub-micron phosphor particles that convert infrared light to visible light. When used in conjunction with antibodies or DNA as a probe label, UPT assays produce no background signal, which dramatically improves the sensitivity of the test.” UPT also has multiplex bioassay capability.
According to STC, the first application of UPT will be in a point-of-care system used to screen for drugs of abuse in oral fluids. This is slated for a market launch sometime after June 2001.
The newly-merged company intends to combine these two technologies into a test device called Ora-QuickHIV. This will be a “visually read, oral fluid testing device, which can detect HIV antibodies within 20 minutes.” Company officials say this product will be offered internationally by this summer. It will soon be in clinical trials in the United States.
The OraSure oral fluids testing technology was developed and brought to market by Epitope. It’s found ready acceptance in the life insurance industry for the medical testing of new life insurance applicants. It is representative of an emerging class of diagnostic assays which are designed to eliminate the need to collect whole blood specimens by needle and syringe.
QUEST DIAGNOSTICS TO BE LISTED IN S&P’S HEALTHCARE GROUP INDEX
IT APPEARS THAT the clinical laboratory industry is gaining favor again with the Wall Street Investment community.
During the past year, a growing number of financial analysts have made favorable recommendations for investments in lab companies such as Quest Diagnostics Incorporated and Laboratory Corporation of America.
Now Standard & Poor’s has joined the club. It announced on May 25 that Quest Diagnostics Incorporated would be added to the S&P Midcap 400 Health Care (Specialized Services) industry group. S&P uses this index to identify and highlight industry financial trends for bondholders and investors.
Quest Diagnostics also earned more recognition when eWEEK Magazine ranked it number one on its FAST-TRACK 100 list of “networking e-business innovators.” The list ranks companies that deploy big-bandwidth pipes in the WAN (wide area network) and build in service redundancy, with 99.99% reliability. Quest Diagnostics’ network currently handles 3.4 terrabytes of data per month.