News in brief - April 11, 2005

Montana passes bill on Blues for-profit conversion - Report says for-profit, nonprofit hospital mix offers benefits - Siemens buys CTI Molecular Imaging

Montana passes bill on Blues for-profit conversion

The Montana Legislature in March passed legislation, supported by the Montana Medical Assn., that would safeguard public assets if BlueCross BlueShield of Montana converts to a for-profit company.

The measure provides that if BlueCross, the state's leading commercial health plan, converts to a shareholder-owned managed care plan, or merges or is bought out by another for-profit plan, the fair market value of the newly for-profit company would be transferred to a nonprofit charitable trust in the form of cash, securities or bonds.

The bill also applies to nonprofit New West Health Services, Montana's second-largest health insurer.

Expected to be signed into law by Gov. Brian Schweitzer, the measure delineates the procedures that state officials should follow if either company wanted to go for-profit and specifies that the state can reject a conversion bid if it is likely to adversely affect the availability or accessibility of either health care services or insurance coverage.

The Blues plan discussed converting to for-profit status three years ago but has not brought up the issue recently.

Report says for-profit, nonprofit hospital mix offers benefits

A new study concluded that having a mix of nonprofit and for-profit hospitals in a community can help keep quality and costs in check because of competitive spillover.

The report, published in March by the National Bureau of Economic Research, found that most markets have too many nonprofit and public hospitals. By boosting competition and encouraging more for-profit hospitals to move in, greater quality of care per dollar can be achieved, the study found.

State and local lawmakers could attract more for-profit hospitals by offering inducements such as zoning waivers and construction subsidies, the report said.

The group recommended that a broader, more in-depth study be done before any such policies would be adopted.

Siemens buys CTI Molecular Imaging

Siemens Medical Solutions USA Inc., Malvern, Pa., has agreed to acquire CTI Molecular Imaging, a Knoxville, Tenn., company that sells positron emission tomography scanners, for $1 billion. Siemens, which sells medical equipment and information systems to hospitals and physician practices, expects to complete the acquisition in the second quarter of 2005.