News in brief - Aug. 16, 2004

Study looks at drug rep visits - Survey: Hospital CEO salaries increase - HCA profits increase - Vanguard is acquired

Study looks at drug rep visits

Pharmaceutical sales representatives visit between 110 and 250 physicians each month to make sales pitches, according to a recent study by Cutting Edge Information, a pharmaceutical business research company based in Durham, N.C.

The study cites obstacles that are making it increasingly difficult for sales reps to see physicians, including new ethical guidelines and more watchful office managers. District managers are emphasizing making contact with younger physicians to develop long-lasting relationships with them, according to the study.

Survey: Hospital CEO salaries increase

A new survey found that the average salary of a hospital CEO/administrator was $328,294, up about 8% from $304,010 in the same survey a year earlier. The findings, announced on July 23, were published by New Jersey-based Hospital & Healthcare Compensation Service in its 2004 annual report on hospital salary and benefits. The study was based on data on more than 154,700 employees at 346 hospitals nationwide. The survey also found that the average bonus reported for a hospital CEO/administrator was $67,184, or about 20% of salary.

HCA profits increase

Hospital giant HCA Inc. reported a 47% jump in profits for the second quarter of 2004, aided in part by lower costs for professional liability insurance.

The Nashville, Tenn.-based hospital chain reported net income of $352 million for the quarter, or 72 cents a share, compared to net income of $240 million, or 47 cents per share, for the same period a year earlier.

HCA credited favorable claim and payment trends, the adoption of tort reform in some states, patient safety programs and lower interest rates for helping it record a $59 million positive change in its professional liability insurance reserves, which helped boost profits.

Revenue for the second quarter increased 6.7% to $5.8 billion from $5.5 billion a year earlier.

Vanguard is acquired

The Blackstone Group, a New York private investment firm, has signed a definitive agreement under which it will a acquire a majority interest in Vanguard Health Systems Inc. for $1.75 billion.

Vanguard Health Systems, Nashville, Tenn., which owns 16 acute care hospitals in Arizona, California, Illinois and Texas, was formed in 1997 by management and Morgan Stanley Capital Partners. In connection with the transaction, expected to close by Oct. 1, management and Morgan Stanley will reinvest in and own about 30% of the company.