News in brief - Feb. 6, 2006

Tenet to restate earnings - Lowe's starts health centers - Allscripts acquires A4 Health Systems - WebMD purchases eMedicine

Patients rev up search engines

Physicians and patients are relying more on Internet search engines to steer them, and many are paying closer attention to alternative media sources such as video and blogs, according to Manhattan Research, a New York-based health care marketing information and services firm.

The report, which describes trends for 2006 but does not quantify their popularity, also says broadband connections are making it easier for physicians and patients to access the Internet for information, which in turn increases the amount of time they spend online.

Prescription drug Web sites are popular sources of information, based on patients and physicians seeing advertisements from another media source.

Tenet to restate earnings

Hospital operator Tenet Healthcare Corp. said it will have to restate earnings during a five-year period after an investigation into managed care contracts at three of its California hospitals uncovered problems.

The Dallas-based company announced Jan. 19 that an audit initiated in July 2005 at the request of the Securities and Exchange Commission found that adjustments would be needed for its financial results for fiscal years 2000, 2001 and 2002, the seven months that ended Dec. 31, 2002, and the full year of 2003. As a result, Tenet said it also would revise earnings from 2004 to take a charge of $47 million.

The adjustments were deemed necessary because some contractual allowances and other reserves lacked adequate supporting documentation or were "otherwise inappropriate," the company said. Tenet added certain revenue and expenses should have been recorded earlier.

The company estimated the adjustments would affect net income or losses by 3% to 9%.

Tenet, the subject of several civil and criminal investigations in recent years, said no widespread problems were uncovered by the audit. Trevor Fetter, Tenet's president and chief executive, said the adjustments were part of the company's continued efforts to "address the legacy of mistakes made by this company."

Lowe's starts health centers

Home improvement retail giant Lowe's Cos. Inc. has opened two on-site health centers at distribution centers in Plainfield, Conn., and Kissimmee, Fla. The company is planning to open three more health centers at other locations this year.

The centers will be run by CHD Meridian Healthcare and will provide acute primary care and wellness services to Lowe's employees. Each facility will be staffed by a nurse practitioner. Altogether, the five facilities are expected to serve 6,800 employees.

Allscripts acquires A4 Health Systems

Allscripts LLC signed an agreement Jan. 19 to acquire A4 Health Systems Inc., a Cary, N.C.-based vendor of physician practice management and electronic medical records software to small- and medium-sized practices, for $272 million in cash and stock.

In a related development, Chicago-based Allscripts and General Electric Co., which sell competing physician practice management and EMR software products, announced they have amended the terms of their strategic alliance.

Under the amended agreement, GE and its IDX Systems unit will continue to market Allscripts' EMR as well as GE's EMR to existing IDX practice management clients for the next 18 months. During that period, Allscripts is barred from marketing any acquired practice management system to current IDX clients. But both companies are free to market their own products to potential new clients without restriction.

Allscripts and GE also agreed to support integration of the Allscripts and IDX products for the next five years.

WebMD purchases eMedicine

WebMD Health Corp. acquired physician-oriented Web site operator eMedicine.com Inc. Jan. 18 for $25.5 million. The acquisition complements the online health information it offers to physicians and other health care professionals, said WebMD Health, which also operates a health information portal for consumers.