News in brief - Nov. 20, 2006

Tenet to sell Alvarado hospital to physicians - Insurers cut jobs - WebMD makes acquisition

Tenet to sell Alvarado hospital to physicians

Tenet Healthcare Corp. has agreed to sell the San Diego hospital that was at the center of a kickback investigation to a company led by physicians.

The Dallas-based hospital chain announced on Oct. 27 that it had reached an agreement to sell the 306-bed Alvarado Hospital Medical Center to Plymouth Health of Los Angeles for about $36.5 million. The deal, subject to regulatory approval, was expected to close by the end of the year.

Plymouth Health was formed for the purpose of acquiring the hospital and is led by pediatricians Pejman Salimpour, MD, and Pedram Salimpour, MD, Tenet said. The two doctors are brothers. They own Los Angeles-based CareNex Health Services, which offers patient management services to hospitals and health insurers. They also own NexCare Collaborative, a nonprofit that helps poor Los Angeles families find affordable health insurance and public health services.

Pejman Salimpour, MD, also led a well-documented fight against hospitals setting up exclusive contracts with specialists. After his lawsuits against a Burbank, Calif., hospital and state lobbying officials, a judge and two state regulators ruled in 2000 that it was illegal for California hospitals accepting state money to set up exclusive contracts with any physicians outside of the hospital-based specialties of pathology, radiology and anesthesiology.

Tenet announced last May that it would sell or close Alvarado and pay $21 million to settle a civil complaint alleging that it paid kickbacks to physicians for referrals to the acute care hospital. The case had previously gone to trial twice, each time ending in mistrial with a deadlocked jury. Under the settlement, Tenet did not admit any wrongdoing.

Insurers cut jobs

Two health plans have announced layoffs.

Tufts Health Plan in Massachusetts said it will lay off fewer than 100 employees and will not fill an additional 50 open positions. The health plan employs 1,800 people. Some of those affected employees were part of Tufts' relationship with Destiny Health of South Africa, a deal that was terminated earlier this year. Destiny provided Tufts with a consumer-directed health care plan, which Tufts eventually plans to roll out on its own.

Meanwhile, Aetna said it will lay off about 650 of the company's 30,000 member work force, including about 200 management positions. CEO Ronald Williams said the move was aimed at improved efficiency and simplification.

WebMD makes acquisition

WebMD Health Corp. announced Nov. 2 that it agreed to acquire Chicago-based health information company Subimo LLC for $60 million in cash and stock. The proposed acquisition, which is expected to close by Jan. 1, 2007, enables WebMD to expand its online health information services to health plans, large employers and financial institutions. It also will help WebMD to better address the emerging consumer-directed health plan market, the company said.