News in brief - Nov. 24, 2003

Health venture capital up - Epic, Philips strike integration deal - Online pharmacy targets rogues - Insurers give breaks to members - Heart hospital pulls ads - Minnesota Blues lays off workers - Business groups fight insurance law

Health venture capital up

Venture capital investments in health care projects rose 24.4% from the second to third quarters of this year, according to Jenks Healthcare Business Report.

The report, by Irving Levin Associates Inc., tracked 106 deals totaling more than $1.4 billion in the third quarter. Deals were worth about $1.1 billion in the second quarter.

Epic, Philips strike integration deal

Epic Systems Corp. and Philips Medical Systems have reached an agreement to integrate and cross-market health care software and medical equipment. Madison, Wis.-based Epic sells electronic medical records software, while Philips, a unit of Netherlands-based Royal Philips Electronics, sells imaging systems, picture archiving and communication systems and patient monitoring equipment. The first integrated solutions will be available in late 2004.

Online pharmacy targets rogues

Drugstore.com Inc. has asked major Internet search engines and portals not to accept advertisements from online pharmacies in the United States and abroad that haven't been certified by the National Assn. of Boards of Pharmacy.

NABP, which among others represents all 50 state pharmacy regulatory boards, has certified 14 online pharmacies, including Bellevue, Wash.-based Drugstore.com.

Insurers give breaks to members

On the heels of BlueCross BlueShield of Tennessee giving rebates on premiums because of better-than-expected financial health, other plans are announcing they will offer rebates or cut premium increases.

Blue Cross and Blue Shield of Massachusetts says it's doing well enough financially that its rate hikes for the rest of 2003 and into 2004 will average 9% for employer plans, compared with 16% for the first half of 2003. The company is Massachusetts' largest health plan.

Medica, based in Minneapolis, on Nov. 4 announced a half-month "premium holiday" for December, meaning premiums would be cut in half for that month. Also, Medica said it is taking advantage of its flush finances by offering a discounted pharmacy program for seniors and offering physicians participation in a quality-based incentive plan. The health plan estimates these benefits are worth about $80 million.

Heart hospital pulls ads

The Heart Hospital of Milwaukee, a new physician-owned facility, has pulled radio advertisements that direct listeners with chest pains to call 911 and ask to be taken to the facility, the Milwaukee Journal Sentinel reported.

The Glendale, Wis., hospital, a joint venture between physicians and Charlotte, N.C.-based MedCath, was asked by the Milwaukee County Emergency Medical System to pull the ads, according to the Journal Sentinel. The 32-bed facility is seeking, but does not yet have, county approval and accreditation as an emergency facility from the Joint Commission on Accreditation of Healthcare Organizations. The hospital told the newspaper the ads were inadvertently released ahead of schedule and called their airing a "mistake."

Minnesota Blues lays off workers

Blue Cross and Blue Shield of Minnesota has told employees that it plans to lay off 130 of its 4,100 workers in an attempt to cut $30 million in overhead, according to the Star Tribune in Minneapolis. A Blues spokesman told the newspaper that the company is trying to cut administrative expenses to $6.40 for every $100 in premiums, down from its current $6.90. With employees getting two months' notice before being laid off, no affected workers will leave until early 2004.

Business groups fight insurance law

A coalition of business advocacy groups in California has firmed up its plan to fight against a law, supported by the California Medical Assn., that would require small businesses in the state to offer health insurance to workers, saying its next step is to collect 373,816 signatures to put the repeal of the law on the March 2004 ballot.

The California Chamber of Commerce, along with such trade organizations as the California Restaurant Assn. and the California Retailers Assn., and some taxpayer protest groups, have said they will join forces to oppose the state's Health Insurance Act of 2003, which was passed by the state Legislature and signed by Gov. Gray Davis earlier in the year. The so-called "play or pay" measure mandates that employers with 20 or more employees either provide health insurance or contribute to a state fund to cover uninsured workers.

The groups argue that the new requirement creates an onerous tax that will fall on the shoulders of the state's businesses and workers and which will force many cash-strapped companies to leave the state.