News in brief - May 9, 2005

HealthSouth leader steps down - California joins RHIO movement - Accenture to acquire Capgemini - Fallon to pay for online consultations - Doctor ends retirement to run Calif. hospital

HealthSouth leader steps down

Joel C. Gordon, who stepped in as HealthSouth's chair in the wake of a massive accounting scandal at the outpatient services giant, has voluntarily resigned from the board, saying it is time for him to retire.

Praised by his colleagues for providing strong leadership during some of the company's darkest days, Gordon was to step down effective May 10.

HealthSouth has been accused of inflating earnings by $2.6 billion in a scheme to meet Wall Street expectations. At least 18 former executives have faced criminal charges in the investigation, and ousted founder Richard M. Scrushy is on trial for allegedly masterminding the plot.

In recent weeks, a handful of charges against Scrushy have been dropped as prosecution and defense attorneys haggled over details of the case. However, the former CEO still faces nearly 50 counts of charges ranging from fraud to conspiracy.

California joins RHIO movement

Several California health care organizations joined forces in April to launch a regional health information organization that will enable physicians and hospitals to connect electronically and share health care data with each other.

Sutter Health, Kaiser Permanente and the WellPoint Foundation have each given $1 million grants to help fund a statewide network called CalRHIO. The University of California also has made a $100,000 grant, and other financial contributors include Lumetra, a San Francisco nonprofit quality improvement organization; John Muir/Mt. Diablo Health System, Walnut Creek, Calif.; and Cedars-Sinai Health System, Los Angeles.

The Health Technology Center, a San Francisco nonprofit research and education organization, is managing CalRHIO. RHIOs are a major component of President Bush's plan to implement a national health information network and electronic medical records for all Americans within 10 years. The Dept. of Health and Human Services has estimated that there are more than 100 efforts nationwide to develop RHIOs.

Accenture to acquire Capgemini

Accenture Ltd. has agreed to acquire Capgemini LLC's North American health practice for $117 million. The proposed acquisition enables Accenture to expand its market beyond health plans, life sciences companies and government organizations to hospitals and health systems.

Following the acquisition, which is expected to close in 90 days, 600 Capgemini employees, including 70 clinicians, will join Accenture's Health & Life Sciences practice in North America, which then will have more than 4,600 employees. Both consulting firms are based in New York.

Fallon to pay for online consultations

Fallon Community Health Plan, Worcester, Mass., announced that it will start reimbursing physicians for online consultations effective July 1. Doctors must use the online consultation service from RelayHealth Corp. The insurer said 12,000 doctors and 180,000 members are eligible to sign up for the service.

Doctor ends retirement to run Calif. hospital

A California hospital that has been shuttered for more than a year will be reopened under a new bankruptcy plan, and a physician who spent most of his career serving patients there has come out of retirement to oversee the revival.

The only hospital serving the Santa Clara Valley for decades, Santa Paula Memorial abruptly closed on Dec. 19, 2003, and filed for bankruptcy.

Ventura County was allowed to buy the hospital and its buildings for about $2.75 million while some other hospital property was sold to pay creditors. The county would operate the hospital through its health care agency, which already runs Ventura County Medical Center and a network of clinics.

The plan was accepted by the bankruptcy court in April and was expected to be finalized in May, said Sam Edwards, MD, who will become the hospital's administrator. The 50-bed facility could reopen sometime in late fall.

Dr. Edwards, an internist, practiced in the community for 25 years and at one time ran the hospital's intensive care unit. He later served as the administrator for VCMC before hanging up his white coat in 2002. But the promise of seeing Santa Paula reopen has lured him back to work.

"I've been in this community a long time, and the community was aghast when [the hospital] failed. So it would be a great privilege to be able to open it again. And I'm in a unique spot to be able to facilitate that, knowing what I know," he said.

Dr. Edwards knows he's got his work cut out for him. Before the takeover, VCMC must get assurances that it will be able to bill government programs for treatment at Santa Paula under its license. "In the meantime, I'm frantically preparing a hospital on paper," he said.