Healthcare Updates by Tim Meyer (MF Attila) McLEAN, VA (Feb 2, 1997) - OUR POLITICAL HEALTH A few more details of the President's budget proposal were disclosed this week (the entire budget will be released on Feb. 6). Health and Human Services Secretary Donna Shalala addressed the American Hospital Association in Washington. She said the Administration did not favor a freeze on Medicare hospital payments but that they would be reduced next year. Additionally, she stated that home health costs have been rising at a rate of 15% to 20% a year. Evidence from recent federal investigations has shown that 25% to 40% of home health visits covered by Medicare were for services that were either not delivered or were provided to patients who did not qualify. Accordingly, the Administration wants to move to a prospective payment system for home health. Health care spending results for 1995 were reported this week. Total spending increased 5.5% to nearly $1 trillion, or an average of $3,621 per person. private-sector spending increased 2.9% while public-sector spending increased 8.7%. Public-sector spending includes federal, state and local spending with Medicare and Medicaid accounting for most of the costs. HEALTHCARE STOCKS IN THE NEWS The Wall Street Journal reported that CVS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CVS)") else Response.Write("(NYSE: CVS)") end if %> is in talks to acquire REVCO DS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RXR)") else Response.Write("(NYSE: RXR)") end if %>. Revco has been buying smaller companies since federal regulators blocked the proposed merger between Revco and RITE AID <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RAD)") else Response.Write("(NYSE: RAD)") end if %> last year. If approved, the merger would put the new company in a virtual tie for the number two drugstore chain with Rite Aid, behind number one WALGREENS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WAG)") else Response.Write("(NYSE: WAG)") end if %>. For the week, CVS finished up 1/4 closing at $43 1/4, while Rite Aid was down 1 3/4 closing at $37 1/2. Walgreen was down an 1/8 at $40. HEALTHDYNE TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HDTC)") else Response.Write("(Nasdaq: HDTC)") end if %> rejected the unsolicited acquisition offer from INVACARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IVCR)") else Response.Write("(Nasdaq: IVCR)") end if %>. Healthdyne's board of directors felt the $12.50 per share offer was "grossly inadequate." Invacare responded by upping the offer to $13.00 per share. Invacare intends to make its latest proposal directly to Healthdyne's shareholders. Healthdyne finished the week up 7/16 closing at $14 7/16 while Invacare was down 3/4 closing at $27. EARNINGS REPORTS MERCK <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MRK)") else Response.Write("(NYSE: MRK)") end if %> reported fourth quarter net income of $1,043 million, or 87 cents a share (compared to estimates of 86 cents), on revenues of $5,406 million, compared with last year's fourth quarter net income of $857.8 million, or 70 cents per share, on revenues of $4,557 million. For the year, net income was $3,881 million, or $3.20 per share, on revenues of $19,829 million, compared to 1995 net income of $3,335 million, or $2.70 per share, on revenues of $16,681 million. The stock finished the week up 5 1/8 closing at $90 3/4. CRA MANAGED CARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CRAA)") else Response.Write("(Nasdaq: CRAA)") end if %> reported fourth quarter net income of $2.9 million, or 32 cents a share, on revenues of $48.6 million, compared with last year's fourth quarter net income of $1.9 million, or 25 cents per share, on revenues of $38.2 million. For the year, net income was $10.1 million, or $1.19 per share, on revenues of $179.7 million, compared to 1995 net income of $6.0 million, or 91 cents per share, on revenues of $146.1 million. The stock finished the week up 1/4 closing at $48 3/4. INVACARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IVCR)") else Response.Write("(Nasdaq: IVCR)") end if %> reported fourth quarter net income of $12.5 million, or 41 cents a share, on revenues of $167.7 million, compared with last year's fourth quarter net income of $10.6 million, or 35 cents per share, on revenues of $143.5 million. For the year, net income was $38.9 million, or $1.28 per share, on revenues of $619.5 million, compared to 1995 net income of $32.2 million, or $1.07 per share, on revenues of $504.0 million. The stock finished the week down 3/4 closing at $27. WARNER-LAMBERT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WLA)") else Response.Write("(NYSE: WLA)") end if %> reported fourth quarter net income of $171.0 million, or 63 cents a share (estimates were 62 cents), on revenues of $1,843.0 million, compared with last year's fourth quarter net income of $123.1 million, or 45 cents per share, on revenues of $1,859.9 million. For the year, net income was $786.5 million, or $2.90 per share, on revenues of $7,231.4 million, compared to 1995 net income of $739.5 million, or $2.74 per share, on revenues of $7,039.8 million. The stock finished the week up 4 1/8 closing at $80 1/2. C. R. BARD <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BCR)") else Response.Write("(NYSE: BCR)") end if %> reported fourth quarter net income of $26.5 million, or 46 cents a share (estimates were 47 cents), on revenues of $314.2 million, compared with last year's fourth quarter net income of $22.8 million, or 40 cents per share, on revenues of $291.0 million. For the year, net income was $92.5 million, or $1.62 per share, on revenues of $1,194.4 million, compared to 1995 net income of $86.8 million, or $1.53 per share, on revenues of $1,137.8 million. The stock finished the week up 1 3/8 closing at $28 1/4. AMERICAN HOME PRODUCTS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AHP)") else Response.Write("(NYSE: AHP)") end if %> reported fourth quarter net income of $511,638, or 80 cents a share, on revenues of $3.5 million, compared with last year's fourth quarter net income of $81,664, or 13 cents per share, on revenues of $3.3 million. For the year, net income was $1.9 million, or $2.96 per share, on revenues of $14.1 million, compared to 1995 net income of $1.7 million, or $2.71 per share, on revenues of $13.4 million. The stock finished the week up 1 7/8 closing at $63 3/8. SUMMIT CARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SUMC)") else Response.Write("(Nasdaq: SUMC)") end if %> reported second quarter net losses of $1,049,000, or 15 cents a share, on revenues of $46.2 million, compared with last year's second quarter net income of $2,043,000, or 30 cents per share, on revenues of $42.8 million. The results included a special charge of $2,420,000, or 35 cents per share, as a result of adjustments resulting from a Medicare audit conducted last year . The stock finished the week up 1/8 closing at $12. That wraps it up for another week. Please share any comments/suggestions on how to improve this feature via e-mail (MF Attila). In the meantime, here is hoping your investments are healthy!

© Copyright 1995-2000, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. The Motley Fool is a registered trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us