News in brief - Jan. 30, 2006

Mergers and acquisitions for 2005 were highest in five years - AAFP sets list of desired attributes for retail health clinics - Tenet settles shareholder suit - N.C. Blues offers e-prescribing - Pediatric drugs expected to see healthy sales growth

Mergers and acquisitions for 2005 were highest in five years

The health care industry recorded 964 mergers and acquisitions in 2005, the most the industry has seen in five years, according to a report by Irving Levin Associates, a health care research firm based in Norwalk, Conn.

The merger and acquisition volume was valued at $158.7 billion, placing it second over the last five years in terms of dollar amount to only the $164.4 billion committed in 2004, according to the report.

The majority of mergers and acquisitions occurred in the pharmaceutical, medical device and biotechnology industries, according to the report.

There were 34 deals involving physician medical groups and 30 involving managed care companies, the report said. The hospital sector recorded 53 deals.

AAFP sets list of desired attributes for retail health clinics

Health clinics established in retail outlets, such as drug stores and groceries, should have a well-defined and limited scope of services and have formal connections to physicians in the community, according to guidelines recently announced by the American Academy of Family Physicians.

The AAFP board settled on the list of desired attributes in December 2005. It issued them to help frame the discussion about retail clinics. The clinics, which often are staffed by a nurse practitioner or physician assistant, are designed to address minor ailments quickly.

But to ensure that the clinics remain true to their original purpose, the AAFP recommends that they should be prepared to refer patients to a physician when symptoms exceed a clinic's capabilities. The organization also suggests that clinics use electronic health records that are compatible with AAFP-recommended systems, so they can easily communicate with the patient's primary care physician.

"Rather than expending energy in an ultimately unsuccessful attempt to 'stop' the retail clinic model, the goal at the national and chapter level should be to provide accurate information, to promote family medicine as the 'medical home,' and to try to ensure that clinics operate according to AAFP's desired attributes," AAFP Board Chair Mary Frank, MD, wrote in a memo.

Tenet settles shareholder suit

Tenet Healthcare Corp. has agreed to pay $215 million to settle two class-action shareholder lawsuits alleging that the hospital chain made false and misleading statements about certain Medicare payments.

If approved, the settlement would resolve lawsuits that are pending in state and federal courts in California. The funds would be distributed to shareholders who qualified under the terms of the agreement. The company did not admit guilt.

Also under the agreement, announced Jan. 12, two former Tenet executives agreed to contribute a total of $1.5 million to the shareholder fund. Former Tenet chief executive and Chair Jeffrey Barbakow agreed to pay $1 million and former chief operating officer Thomas Mackey agreed to pay $500,000, Tenet said.

Shareholders sued in 2002 alleging that Tenet and some of its leaders made false statements about Medicare outlier payments. The company voluntarily changed its outlier billing practices in 2003, a few days before the U.S. Justice Dept. sued, claiming that Tenet had overbilled Medicare. The Securities and Exchange Commission has also launched an investigation into the matter.

N.C. Blues offers e-prescribing

BlueCross BlueShield of North Carolina announced Jan. 12 that it will offer electronic prescribing systems at no cost to 1,000 in-network, high-prescribing physicians.

Under the $1.2 million initiative, which is designed to encourage physicians to prescribe electronically, doctors will receive a wireless router, handheld computer and a one-year free subscription to the software, said Rita Simonetta, a spokeswoman for the Blues.

If doctors decide to use the system after the one-year period expires, they will have to pay a $500 annual fee, she said.

Pediatric drugs expected to see healthy sales growth

Sales of pediatric prescription drugs are expected to grow more than 6% annually and exceed a total of $46 billion by 2009, according to a report by Kalorama Information, a division of the life science researcher MarketResearch.com.

Experts point to the high number of children in Asia, Africa and Latin America as their reason why the pediatric prescription drug industry will continue to grow. The market was expected to see sales of about $36.4 billion in 2005, according to the report.

Allergy gastrointestinal drugs were expected to lead the growth of the overall industry, according to the report.