KANSAS CITY, Kan.-The University of Kansas Hospital Authority has received an underlying A rating on $55.5 million of debt set to be issued the week of Sept. 20. Fitch IBCA, a New York-based credit rating agency, assigned the rating based on the hospital's strong debt service coverage, low debt burden and excellent clinical reputation. It also expressed confidence the university hospital will be able to compete more effectively in its marketplace as a result of its separation from the state of Kansas. As of Oct. 1, 1998, the hospital went off the state budget and became an independent organization with its own board of directors (Oct. 5, 1998, p. 24). Fitch expects the public authority status to allow the hospital more management flexibility, easier access to capital and better options for finding business partners. Under such conditions, the hospital's 5% operating margin should improve, according to Fitch. University of Kansas Hospital has 620 licensed beds and 411 staffed beds. The bond issue will be used to finance capital expenditures, refinance bank debt, reimburse previous capital expenses, refinance leases and establish a debt-service reserve fund.
WORTHINGTON, Ohio-Ohio State University Medical Center has approved a merger with 24-bed Harding Hospital, a behavioral health hospital in Worthington. OSU and Harding have operated jointly since January 1996, when Columbus-based OSU acquired an equity stake in Harding. OSU's equity reached 50% last year. The merger is expected to be completed by December. George Harding IV, M.D., grandson of the hospital's founder, will continue to have a seat on the OSU/Harding Hospital board.
MADISON, Wis.-Wisconsin's 24 HMOs lost more than $18.6 million during the first half of the year ended June 30, according to a new report from the state insurance commissioner. The HMOs collected $1.5 billion in total revenues during that same period. HMO performance has declined dramatically when compared with the same two quarters a year ago. During the first half of 1998, the state's HMOs earned $676,000 on total revenues of $1.3 billion, according to state figures.
CHICAGO-HMO enrollment in Illinois grew 3.8% last year, according to a new report on the Illinois healthcare market. Last year's slower growth comes after double-digit increases in HMO enrollment in 1995 and 1996, according to the report by Allan Baumgarten, a Minneapolis-based healthcare analyst who studies managed-care trends in seven states. HMO enrollment grew by 4.8% in 1997. In Illinois, about 2.4 million residents-just less than 20% of the state's population-are enrolled in an HMO.
OMAHA, Neb.-Two-hospital Nebraska Health System and two-hospital Nebraska Methodist Health System, both of Omaha, will merge their mental health services into a single facility. The agreement, which was signed Sept. 8, provides for shared ownership of an inpatient facility, 121-bed Richard Young Center, formerly called Methodist Richard Young. Comprehensive psychiatric services will be housed in three Nebraska Methodist-owned buildings to be renovated with $4 million provided equally by both systems. Sandra Carson is president and chief executive officer of Richard Young. University of Nebraska Medical Center will use Richard Young as a teaching facility. Governance will be through an eight-member board, with three members each from Nebraska Health and Nebraska Methodist, and two nonvoting members from UNMC.
IRON MOUNTAIN, Mich.-Construction could begin this fall on an estimated $3.5 million project to provide cancer radiation therapy at Dickinson County Memorial Hospital. Executives said late last month that a state certificate of need has been approved for the facility, which will be operated in cooperation with Marquette (Mich.) General Hospital. Plans will proceed to add 7,500 square feet of space on the main floor at the east end of Dickinson Memorial to house the megavoltage radiation therapy unit, Administrator John Schon said. ``We are extremely excited and proud to be able to bring this much-needed service to the cancer patients in this area,'' Schon said. The Dickinson County Healthcare System board of trustees has approved a list of 10 pre-qualified construction bidders. Bids will be let in mid-September and will be due in mid- to late October.
