News in brief - April 17, 2006

MGMA notes "successful" group traits - Blues plan expands e-consultations - Hospital gives patients personal health record software - Report: Merger values jump - HealthSouth loss swells

MGMA notes "successful" group traits

The more successful medical groups pay closer attention to staffing issues and invest in ancillary service lines, according to a recent report published by the Medical Group Management Assn.

The report, "2005 Performance and Practices of Successful Medical Groups: 2005 Report Based on 2004 Data," distinguishes "better performer" groups from "others" based on performance, and it attempts to pinpoint factors in their success. The report says more than 40% of the groups classified as better performers acquired equipment and materials to provide new services in 2004, compared to only 7.4% of groups in that category that said they did not. Only 33% of other groups said they had acquired equipment for new services in 2004, according to the report.

Revenue per full-time equivalent physicians was $362,660 in better performing groups, a nearly 33% increase over the $273,037 reported for other groups, according to the report. Meanwhile, operating costs per physician was higher among better performing groups in 2004 as well, leading MGMA researchers to the conclusion that investments in support staff contribute to higher productivity, according to the report.

The report was based on data collected from more than 1,200 groups for MGMA's 2005 cost survey as well as from responses to an additional questionnaire that asked practices for operations and financial information.

Blues plan expands e-consultations

After successfully testing paid online consultations for 18 months, WellPoint-owned Empire BlueCross BlueShield announced on March 30 that it's expanding the availability of online consultations to all of its HMO members.

Effective July 1, the New York-based Blues will reimburse physicians $25 for each consultation they do online with the plan's more than 400,000 HMO members.

Hospital gives patients personal health record software

Thomas Jefferson University Hospital announced March 28 that it is giving CD-ROMs containing online personal health records software to 100,000 patients at no cost, enabling them to create personal health records that they can share with physicians and other clinicians.

In addition to containing PHR software from CapMed, a division of Bio-Imaging Technologies Inc., the CD-ROMs also will connect users to the Philadelphia-based hospital's online resources, trigger reminders and provide age-specific health management guidelines. The hospital also will give the CD-ROM to anyone who requests it in response to an advertising campaign it will launch in local newspapers and on its Web site.

Report: Merger values jump

Mergers and acquisitions in the health care services industry were valued at $46.3 billion in 2005, a 19% jump over the $39 billion reported in 2004, according to research compiled by Irving Levin Associates, a health care research firm based in Norwalk, Conn.

The 523 deals announced in the services sector were a 24% increase over the 423 deals announced during 2004, according to the report. Deals included 50 hospital transactions, a drop from the 59 deals announced during 2004, according to the report. Prices of those facilities were higher, however, because they were of higher quality, according to the report.

The report cited 30 mergers and acquisitions among managed care companies in 2005, worth a combined $9.2 billion. Three of the deals were worth more than $1 billion, according to the report.

HealthSouth loss swells

HealthSouth Corp.'s losses surged to $446 million in 2005, in part because of a multimillion-dollar legal settlement in the wake of the massive accounting fraud at the troubled outpatient services giant.

In a filing with the Securities and Exchange Commission on March 29, HealthSouth said its earnings reflected a $215 million settlement to resolve securities class-action lawsuits and derivative actions.

The loss, which amounted to $1.12 per share, compared with a smaller loss a year earlier of $174 million, or 44 cents per share. Revenue dipped in 2005, totaling $3.2 billion, down from $3.5 billion in 2004.

The Birmingham, Ala.-based company said it has made advancements in key parts of its strategic business plan, including revenue, cost, quality, management and infrastructure.

The plan was put in place to turn around the company in the wake of the accounting scandal, which first surfaced in March 2003 and resulted in at least 18 former executives facing criminal charges.

Since then, the company has replaced many of its top leaders and devoted resources to defending litigation, righting its books and restructuring its finances.