News in brief - March 24/31, 2003

Big market for anti-obesity drugs - Atlanta hospital holds recruitment Webcast - Kaiser posts smaller profit - Medix cancels merger with PocketScript - PacifiCare releases hospital index

Big market for anti-obesity drugs

Emerging anti-obesity drugs are expected to generate more than $500 million in revenue by 2008, according to a new market report by Front Line Strategic Consulting Inc., a San Mateo, Calif.-based analysis firm for the life sciences industry. The report, "Emerging Anti-Obesity Therapeutics," details the development of several new appetite suppressant and weight-loss drugs and analyzes the current market as it faces this rapidly growing problem.

"There is great market potential for novel drug classes to treat patients who are unresponsive or unsuitable for current drugs," said Rachel Loui, an analyst for Front Line.

Atlanta hospital holds recruitment Webcast

Piedmont Hospital, an Atlanta medical center founded in 1905, took its recruiting efforts to another plane when it held a live Webcast March 4 to promote its opportunities to prospective employees beyond its normal reach.

The hospital and the host Web company, slp3D, which broadcasts surgeries on the Internet, called the program the first of its kind in health care recruitment.

According to preliminary estimates, more than 1,000 people logged on to the Web site during the 40-minute presentation, which included live interviews with current employees, Piedmont spokeswoman Nina Montanaro said. The hospital also received 25 job solicitations and questions via e-mail during the program, she said.

"We have nothing to compare it with, but we're claiming success," Montanaro said.

Piedmont focused its recruiting on nurses and other health professionals, and it concentrated its promotion of the program in the Southeast, Montanaro said. The Webcast will be available for viewing for a year from the hospital's Web site (http://www.piedmontjobcure.com/).

Kaiser posts smaller profit

Kaiser Foundation Health Plan and Kaiser Foundation Hospitals posted a net income of $70 million for the year ended Dec. 31, 2002, down from $681 million in 2001.

The results reflected a $442 million charge Kaiser took in the fourth quarter to scrap its homegrown electronic medical records system in favor of a commercial system Kaiser agreed to acquire for $1.8 billion, Kaiser said. The results also reflect increased pension funding obligations and lower returns on investments.

Kaiser reported $22.5 billion in revenue for 2002, up from $19.7 billion.

Medix cancels merger with PocketScript

Medix Resources Inc. has acquired ePhysician Inc. from Comdisco Ventures and terminated an acquisition of another electronic prescribing software company, PocketScript LLC over a two-day period in March.

On March 5, New York-based Medix announced it had acquired ePhysician from Comdisco Ventures, a venture capital firm that gained control of ePhysician last year when the company was unable to repay money it owed Comdisco. Terms were not disclosed.

One day after acquiring ePhysician, Medix terminated its merger with Cincinnati-based PocketScript without citing a reason. Medix, however, "has experienced recurring losses and has a working capital deficit, which raise substantial doubt about its ability to continue as a going concern," according to a recent filing with the Securities and Exchange Commission.

According to SEC filings, Medix signed a letter of intent in October 2002 to acquire PocketScript for a combination of preferred convertible stock and cash, and completed a definitive agreement last December to merge with PocketScript, subject to certain conditions.

The company's stock recently was trading below 50 cents on the American Stock Exchange.

PacifiCare releases hospital index

PacifiCare of California released public data March 4 detailing the performance of the academic and community hospitals in its network.

More than 200 hospitals are included in the report, which rates the facilities based on more than 50 criteria, including volume and success rate of certain surgical procedures, patient safety measures, patient satisfaction and utilization.

The idea of the Quality Index profile is to give the health plan's 2 million members information to help them make informed decisions on care, which should provide incentives for hospitals to improve, PacifiCare Health Systems president and CEO Howard G. Phanstiel said.

"We listened to consumers and employers who are demanding greater information concerning quality, service and affordability at the hospital level and have responded with the industry's first report concerning hospital performance," he said.