News in brief - April 21, 2003

Doctors' real-dollar income falls - HCA-Health Midwest deal completed - Cerner stock hammered

Doctors' real-dollar income falls

Average physician net income dropped 5% between 1995 and 1999, while other skilled professionals' income increased by an average of 3.5%, according to a national report released by the Center for Studying Health System Change.

The figures, which were adjusted for inflation, were even more jarring for primary care physicians, who saw an average 6.4% income drop over those four years. Specialists saw their incomes drop by 4%, according to the report.

The late 1990s were in stark contrast to the early part of the decade, when doctors' incomes were growing beyond the rate of inflation each year, according to the report.

The Center for Studying Health System Change, a Washington, D.C.-based policy research organization funded exclusively by the Robert Wood Johnson Foundation, attributed the decline in income to the growth of managed care. The average net income for physicians in 1999 was about $187,000, according to the report. The average for specialists was $219,000, while the average for primary care physicians was $138,000.

HCA-Health Midwest deal completed

The long-discussed deal between nonprofit Kansas City, Mo.-based Health Midwest and for-profit HCA Inc. was completed April 1, after Health Midwest settled a dispute with Kansas officials over how to split sale proceeds.

The $1.1 billion deal gives 12 Health Midwest hospitals to Nashville, Tenn.-based HCA. HCA also assumes about $183 million of debt and leases as part of the deal and has pledged to commit at least $450 million in capital expenditures to improve the hospitals. HCA paid $855 million in cash at closing, according to company statements.

Proceeds from the sale will be divided among separate foundations in Missouri and Kansas. Health Midwest and Kansas Attorney General Phill Kline reached an agreement last month to establish the two foundations, with at least 20% of the net proceeds going to Kansas.

Cerner stock hammered

Cerner Corp. saw its stock plunge more than 40% after the company warned Wall Street on April 3 that earnings for the first quarter would fall well below its previous estimate.

The Kansas City, Mo.-based seller of clinical information systems for hospitals and physicians said a key reason for the shortfall is a decline in new business bookings, which Cerner expects will range from $145 million to $150 million, down from the $200 million estimate it had given out at the beginning of the year. Cerner expects to book $189 million to $192 million for the quarter ended March 31.