News in brief - May 8, 2006

Wal-Mart extends benefits to more workers - WebMD acquires wellness company - Tenet moves out of Mississippi

Wal-Mart extends benefits to more workers

Wal-Mart Stores Inc. announced that it is changing its health benefits, expanding access to more part-time employees and their children.

The company, criticized by labor unions and state legislators for offering low wages and stingy benefits, said that effective May 13, part-time employees will be eligible for health coverage after one year of service, down from two years. The world's largest retailer also is offering coverage to the children of those employees.

The company, which will hold a special midyear enrollment period this month, estimates that more than 150,000 part-time employees will be eligible for initial and enhanced coverage when the revised benefits kick in.

The health coverage will cost employees not more than $23 per month per employee and $15 for their children, no matter how large the family.

And starting in 2007, Wal-Mart said it plans to make that coverage available to half of all its employees for as little as $11 a month plus and additional $9 for children.

Other changes effective next year include reducing co-pays on generic prescriptions for common conditions to $3 from $10, Wal-Mart said.

WebMD acquires wellness company

WebMD Health Corp. announced April 17 that it agreed to acquire Summex Corp. for $30 million and will pay an additional $10 million over a two-year period if certain milestones are achieved. Based in Indianapolis, Summex sells wellness and health-risk appraisal programs to health plans and large employers.

Summex reported that it broke even in 2005, with $6 million in revenue. But WebMD expects the company's services to be in greater demand with the growth of consumer-directed health plans and employers' increasing efforts to encourage employees to live healthier. The transaction is expected to close by July 1.

Tenet moves out of Mississippi

Tenet Healthcare Corp. has announced plans to sell its only hospital in Mississippi, saying the devastating impact of last year's Hurricane Katrina has caused it to re-evaluate its operations in the area. The Dallas-based hospital operator said on April 17 that it had reached an agreement to sell the 189-bed Gulf Coast Medical Center in Biloxi, Miss., to Health Management Associates Inc.

Proceeds from the sale, to be completed by May 31, were expected to total about $16 million.

Tenet said it decided to sell the hospital to HMA because it wanted to turn it over to an operator that has a significant presence in the area.

In addition to Gulf Coast Medical Center, Tenet operated five hospitals in Louisiana that were affected by the destructive late-summer storm.

The company posted a $408 million third-quarter loss last November, blaming much of the shortfall on the effects of the hurricane.