News in brief - Jan. 24, 2005

Guilty plea in Tenet hospital case - Biotech industry saw growth in 2004 - Health care venture capital up - HIMSS, URAC form marketing pact - Radiology portal acquired

Guilty plea in Tenet hospital case

The former administrator of a Tenet Healthcare Corp. hospital in San Diego has agreed to plead guilty to a charge of conspiracy in the federal government's ongoing investigation of whether the hospital paid illegal kickbacks to physicians to boost patient referrals.

Tenet announced on Jan. 5 that Mina Nazaryan, former assistant administrator at Alvarado Hospital Medical Center, had entered into the plea agreement. The U.S. Attorney's office in San Diego declined to comment on the deal, citing the ongoing trial of the other defendants in the case, including the hospital, a Tenet subsidiary and former Alvarado chief Barry Weinbaum.

Tenet did not say what penalties Nazaryan could face or whether she was expected to testify against the other defendants.

Prosecutors have alleged that Alvarado and another Tenet subsidiary paid more than $10 million to fund more than 100 physician relocation agreements between 1992 and 2002 to recruit medical services to the hospital's service area. But they claimed that a "substantial portion" of the money went to established doctors to induce them to make referrals to Alvarado.

Tenet has denied wrongdoing, saying it stands by its physician recruitment practices.

In a statement about Nazaryan, the company said, "Nazaryan's plea is hers alone. It will not affect our decision to vigorously defend the hospital and its chief executive officer."

In another matter, Tenet said it had agreed to pay $31 million to settle 106 lawsuits filed against its Palm Beach Gardens Medical Center in Florida. The plaintiffs alleged they contracted postoperative infections after having cardiac surgeries at the facility.

Biotech industry saw growth in 2004

Biotech companies raised more than $20 billion last year, including 30 firms that joined the publicly traded ranks through initial public offerings, according to a report by Burrill & Co, a San Francisco-based life sciences merchant bank.

The 30 IPOs raised nearly $1.8 billion in 2004, and Burrill is expecting even more companies to go public in 2005. More than half of the funds raised by biotech firms last year were through partnerships and licensing agreements, a trend the bank expects to continue this year.

Biotech's market capitalization rose 16% in 2004, from $344 billion to $400 billion, according to the report.

Health care venture capital up

Nearly 400 health care companies were boosted by venture capital investments in 2004, with the $6.9 billion total representing a 23% increase over the financial commitments made in 2003, according to Irving Levin Associates Inc., a health care research firm based in New Canaan, Conn. The firm recorded 97 deals and $1.6 billion invested during the fourth quarter of 2004.

While the number of deals was up from the 81 recorded during the same period of 2003, the investment total was slightly below the $1.8 billion recorded. The fourth quarter was the only period in which the 2004 financial figures did not top the 2003 figures, according to Irving Levin Associates.

HIMSS, URAC form marketing pact

The Healthcare Information and Management Systems Society and URAC reached agreement this month to market each other's products to their respective members and customers. Under their marketing agreement, HIMSS will promote URAC's accreditation programs for HIPAA privacy, security and Web sites while URAC will market HIMSS membership, programs and services.

Radiology portal acquired

IMV Ltd., a Greenbelt, Md.-based marketing research and consulting firm in January acquired AuntMinnie.com from Eastman Kodak Co. Terms were not disclosed. AuntMinnie.com is an international Web site for radiologists and medical imaging professionals.