News in brief - April 7, 2003

Mass. Blues pay for online consult - Interventional cardiology poised for growth - Hospitals feel sick in the wallet - Quadramed delisted - HCA expands charity care - Adam in the red

Mass. Blues pay for online consult

Blue Cross and Blue Shield of Massachusetts has plans to start paying physicians $20 for online consultations on nonurgent matters as part of a pilot program this summer. Patients' co-payments will vary according to their health plan.

Interventional cardiology poised for growth

With development of drug-eluting stents, revenues in the U.S. interventional cardiology market are expected to more than double by 2006, according to analysis by Frost & Sullivan, a San Jose, Calif.-based market research and consulting company.

Interventional cardiology products produced $2.1 billion in revenue in 2002, and revenues are likely to reach $4.7 billion in 2006, according to the Frost & Sullivan report.

New technology, like drug-coated stents, and an aging population will be behind the increase, analysts said. The population of adults 65 and older is expected to increase by 50% in the next 30 years, and those people are the prime candidates for cardiovascular procedures, analysts said.

Hospitals feel sick in the wallet

A survey of more than 2,000 hospitals across the nation showed a negative average operating margin and a bed occupancy of just more than 50%, according to Data Advantage Corp., a Louisville, Ky.-based health information company.

The report, called the "National Average Benchmark," measures Medicare cost report data between 2001 and the second quarter of 2002. It also compares hospital performance data with Moody's Investors Service High Performance Benchmark, which provides mean scores for hospitals the company has rated in its A or AA categories.

Data Advantage reports average operating margin was -0.5% among all hospitals, compared with a margin of 1.6% to 2.2% for higher-rated hospitals. The Moody's data also show higher-rated hospitals had cash on hand to cover between 189 and 294 days, compared with the overall hospital average of 32.5 days, according to the report. The average hospital occupancy rate of 54.8% is between 13 percentage points and 17 percentage points lower than occupancy rates for hospitals in the higher-rated categories, according to the report.

Data Advantage points out a drastic difference between for-profit and nonprofit hospitals as well: For-profit facilities reported an operating margin of about 10%, compared with a nonprofit operating margin of about -2%.

More information on the report is available at the Data Advantage Web site (www.data-advantage.com).

Quadramed delisted

The Nasdaq National Market has delisted Quadramed Corp. due to the company's failure to file restated annual financial and quarterly reports with the Securities and Exchange Commission. San Rafael, Calif.,-based Quadramed sells health care software and services.

HCA expands charity care

HCA Inc., the nation's largest for-profit hospital chain, has announced plans to expand its charitable care policies to provide more financial relief to uninsured and low-income patients.

Under a proposed policy change announced March 11, patients treated at an HCA hospital for nonelective care would be eligible for charity care if they have an income at or below 200% of the federal poverty level. According to the U.S. Dept. of Health and Human Services, the poverty level for a family of four in the continental United States is $18,100.

HCA estimated that 70% of its hospitals already used this standard.

Adam in the red

Atlanta-based Adam Inc. lost $289,000 for the quarter ended Dec. 31, 2002, compared with $445,000 for the same period in 2001. The quarterly result reflected charges of $426,000 related to the settlement of an obligation and impairment of investments it had made in two companies, according to Adam, which develops and licenses online health content.

Revenue for the quarter was $2.4 million, up from $2.1 million for the same period in 2001.

For the year ended Dec. 31, 2002, Adam posted a loss of $1.5 million, compared with a gain of $1.6 million in 2001. Annual revenue was flat at $8.95 million.