News in brief - June 2/9, 2003

U.S. Oncology reports dramatic gain in first quarter results - Tenet records losses NDCHealth buys TechRX

U.S. Oncology reports dramatic gain in first quarter results

U.S. Oncology Inc., the Houston-based company that manages cancer centers and oncology practices in 29 states, reported net income of $16.3 million in the first quarter of 2003, a 207% increase over the $5.3 million it reported during the first quarter of 2002. It reported earnings of 17 cents per share, compared with 5 cents per share during the first quarter last year.

The company also saw revenues increase 14.6%, from $500.9 million in the first quarter of 2002 to $574.1 million during the same period this year.

U.S. Oncology, which reported $8.9 million in additional charges during the first quarter last year due to restructuring and early debt payments, attributed its revenue increase to its growth and strategy changes. The company opened three new cancer centers during the first quarter of 2003 and has been working with practices to operate under a service-line model contract, which separates practice management services under different contracts instead of charging one fixed fee.

Tenet records losses

Tenet Healthcare Corp., the nation's second largest for-profit hospital chain, posted a first-quarter net loss of $20 million, attributed partly to changes in the company's Medicare outlier policy.

Tenet said the loss, equivalent to 4 cents per share and compared with a net income of $278 million or 55 cents per share in the same quarter a year earlier, reflects the impact of lower outlier revenue. The Santa Barbara, Calif.-based company voluntarily changed its Medicare outlier policy on Jan. 1 in the wake of a federal investigation.

Bolstered in part by increased admissions, the company said its net operating revenue increased 2.3% to $3.45 billion for the quarter, compared with $3.38 billion during the same period last year.

Tenet, which owns and operates 114 hospitals, announced in April that it was replacing one third of its board and would appoint a new chair to address the concerns of shareholders.

NDCHealth buys TechRX

NDC Health Corp. has agreed to acquire the remaining 37% of TechRX Inc. it does not own for $110 million in cash. Atlanta-based NDC Health sells physician practice management software and medical transaction processing and pharmaceutical information services. TechRX, Coraopolis, Pa., sells pharmacy information systems.