Healthcare Updates by Tim Meyer (MF Attila) McLEAN, VA (March 16, 1997) -- It was a pretty light week for news, other than the First Patient's fall and subsequent surgery. OUR POLITICAL HEALTH The Health Care Financing Administration (HCFA) sent stock prices of heart laser companies tumbling when it announced that it will institute a non-coverage policy for transmyocardial revascularization procedures performed on Medicare patients in the United States, on or after May 19, 1997. I don't understand all the hubbub. HCFA has always withheld reimbursement before an investigational device receives approval by the U.S. Food and Drug Administration (FDA). The FDA has not yet approved lasers for this procedure but it is expected to rule on the issue sometime this summer. If the FDA approves the procedure, HCFA will most likely change their policy. HEALTHCARE STOCKS IN THE NEWS Speaking of HCFA, there is a sordid little story going on across the river from here in our nation's capital (actually there are a bunch of them but this one has a health care connection). It seems that Chartered Health Plan Inc., a unit of PHP HEALTHCARE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PPH)") else Response.Write("(NYSE: PPH)") end if %> filed claims of $37.5 million for Medicaid patients in the District of Columbia from 1992 through 1994. Like a number of other areas, the District didn't pay all the bills and last year a settlement was worked out for an immediate cash payment of $18.9 million, which would be split evenly between the District and HCFA. This week, the District of Columbia's chief financial officer blocked the payment because of concerns that the District was being "robbed blind." The payment was authorized by the City Administrator even though the District's health care finance commissioner reports the actual unreimbursed expenses total only $6.2 million. The Associated Press reported that Chartered contributed $7,900 to Mayor Marion Barry's 1994 mayoral campaign and Chartered's president also was a co-chairman of a committee on the mayor's transition team after the election. The City Administrator denies there is any connection between the deal worked out and Chartered's support of the mayor. I have not seen a comment from HCFA on the matter. PHP Healthcare says it will pursue litigation, if necessary, to collect. For the week, PHP Healthcare was down 6 1/4 closing Friday at $14 1/4. MEDPARTNERS, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MDM)") else Response.Write("(NYSE: MDM)") end if %> and INPHYNET MEDICAL MANAGEMENT INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IMMI)") else Response.Write("(Nasdaq: IMMI)") end if %> announced the termination of the waiting period required under the Hart-Scott Rodino Anti Trust Improvement Act with respect to their pending merger. For the week, MedPartners was up 1/2 closing at $24 1/8 while InPhyNet was up 5/8 closing at $31. UNISON HEALTHCARE CORPORATION <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: UNHC)") else Response.Write("(Nasdaq: UNHC)") end if %> announced that it expects to restate its previously issued results for the nine months ended September 30, 1996. The company estimates that the restatement will have a negative impact on year-to-date results of approximately $5 to $6 million pre-tax, or $3 to $3.6 million after tax. For the week, Unison dropped 5 7/8 closing at $3 7/8 (ouch). ACCESS HEALTH <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ACCS)") else Response.Write("(Nasdaq: ACCS)") end if %> announced that it is likely to earn between $0.82 and $0.84 a share for 1997 (estimates had been $0.99) because of a slower pace of enrollment in its managed-care plans. Contributing to the problem was a decision by Blue Cross Blue Shield of Tennessee to discontinue providing Personal Health Advisor services to its TennCare Medicaid population in April 1997. For the week, Access was down 8 closing at $14 1/2. Blue Cross and Blue Shield of Missouri and RIGHTCHOICE MANAGED CARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RIT)") else Response.Write("(NYSE: RIT)") end if %> announced that they have ended discussions with BJC Health System concerning a possible alliance or business combination. The companies determined "that current Blue Cross and Blue Shield Association rules are not flexible enough to allow the creation of a vertically integrated structure that will achieve the desired benefits for members and shareholders." RightCHOICE was down 1 1/8 for the week, closing at $14 3/8. The Ohio Department of Insurance rejected COLUMBIA/HCA HEALTHCARE 's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:COL)") else Response.Write("(NYSE:COL)") end if %> $299.5 million purchase of Blue Cross and Blue Shield of Ohio. The purchase ran into opposition from consumer groups and raised questions about whether the sale price was adequate compensation. Blue Cross will have 30 days to appeal. It was also announced that Doctors Hospital signed a letter of intent to enter into negotiations with Columbia/HCA to purchase Doctors Hospital North and Doctors Hospital West in Columbus, Ohio, as well as Doctors Hospital of Nelsonville, Ohio. For the week, Columbia/HCA finished down 1/4 closing at $43 1/4. EARNINGS REPORTS IMAGE GUIDED TECHNOLOGIES, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IGTI)") else Response.Write("(Nasdaq: IGTI)") end if %> reported fourth quarter net income of $127,000, or 5 cents a share, on revenues of $1,168,000, compared to last year's fourth quarter net loss of $192,000, or $0.11 a share, on revenues of $772,000. For the year, the company reported net income of $355,000, or $0.15 a share, on revenues of $4.08 million, compared with 1995's net loss of $1.052 million, or $0. 63 a share, on revenues of $1.17 million. For the week, the company was down 3/8 closing at $6 3/4. 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!

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