Healthcare Update
by Tim Meyer (TMF Attila)

McLean, VA (May 12, 1997) -- There was a whole bunch of health care news out there this week, which is why this missive is a little longer than usual. If you would like to have this weekly update forwarded to your e-mail address, send a request to TMF [email protected] and I'll add you to the mail list.

OUR POLITICAL HEALTH

SMOKE OUT UPDATE

By my count, Montana became the 25th state to join the list of states suing the tobacco companies. This action was taken before the Jacksonville, Florida, jury announced its verdict finding that the R. J. Reynolds was not responsible for the lung cancer death of a longtime customer. It remains to be seen what impact this verdict will have on "negotiations". What the jury seemed to say is it's not the cigarettes fault when smokers get sick or die, it's the fault of the people who smoke cigarettes.

THE GRASS IS ALWAYS BROWNER...

I never cease to be amazed by survey results like the one released this week by Yankelovich Partners underwritten by PACIFICARE HEALTH SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PHSYA/PHSYB)") else Response.Write("(Nasdaq: PHSYA/PHSYB)") end if %>. Seventy-three percent of those surveyed feels "there is something seriously wrong" with the way the nation's health care system is currently working. Fifty-five percent also said the quality of health care available "is not as good as it used to be," but 85% are satisfied with their current health plan. The study polled 1,458 Americans who were generally split between fee-for-service plans (37%), PPOs (32%) and HMOs (25%). Eighty-seven percent of HMO members were satisfied compared to 90% of fee-for-service plans and 91% of Medicare HMO members (the press release did not specify what brought the overall satisfaction level down to 85%).

I see a survey like this about once a month. They seem to say, I'm happy, but it must be a mess for everybody else. Is anybody else, especially in the media and government, paying attention to this phenomenon? For the week, PacifiCare 'A' shares were up $1/8 (0.2%) closing at $75 1/8 on Monday.

THEY'RE COMING TO TAKE YOU AWAY...

The Wall Street Journal had an article this week on the government's crackdown on health care fraud. It was pointed out that the Kassebaum-Kennedy law passed last Congress increased federal funding for fraud efforts and let "them tap into the Medicare trust fund for the first time" (the one going broke in 2001). As a result, the FBI has 350 people investigating the medical industry up from 290 last October, the Internal Revenue Service has 160 employees in the criminal division concentrating on health-fraud, up from 80 three years ago, and the Justice Department plans to double the number of health-fraud prosecutors with 115 new people (Aren't you glad "the era of big government is over"?).

The article quoted Secretary of Health and Human Services Donna Shalala who said, "Rather than look for people who are nickel-and-diming the program, we've ratcheted up. We have to demonstrate that we have the guts to go after the big players in health care."

The article mentioned the recent probe of COLUMBIA/HCA HEALTHCARE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: COL)") else Response.Write("(NYSE: COL)") end if %>, pointing out, "The big hospital chain hasn't been charged with any wrongdoing." The article also pointed out that "a survey last year by the American Association of Retired Persons found that 70% of adults believe Medicare's financial problems could be cured if fraud and abuse were eliminated." (It did not state how many of those people also believe in the tooth fairy).

Secretary Shalala also said, "Wherever there is growth in the Medicare program, that's where there are problems." Since the recent budget agreement reduces growth in Medicare spending by $135 billion, I guess they have already taken a big step to reduce the level of fraud.

For the week, Columbia/HCA was up $1 1/8 (3.1%), closing on Monday at $37 7/8.

HOW MUCH IS THAT DOGGIE IN THE WINDOW?

The Department of Human Services for the State of Rhode Island recently awarded a $1.4 million contract to Medimetrix, a health care consulting firm, to assist in the redesign of the state's healthcare delivery system with particular focus on serving the state's elderly and disabled populations. The Boston-based Medicaid Working Group is collaborating as a subcontractor.

The press release announcing this effort mentioned that the project team includes technical consultants in "financial and actuarial analysis and legal and regulatory issues." Remembering that the Rhode Island Attorney General, Jeffrey Pine, took out an ad in The Wall Street Journal in February looking for help in determining if the $41 million sales price offered by Columbia/HCA for the Roger Williams Medical Center in Providence was fair, it occurred to me maybe he could pick up the phone and give the Rhode Island's Human Services Department a call. Maybe they could get one of these consultants to take a look at the deal?

HEALTHCARE STOCKS IN THE NEWS

The Motley Fool's Daily Double feature this past week discussed CRITICARE SYSTEMS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CXIM)") else Response.Write("(Nasdaq: CXIM)") end if %> on 05/06/97 and is worth a read. For the week, Criticare was down $1/8 (2.4%), closing on Monday at $5 1/8.

The Food and Drug Administration (FDA) approved the first laser system that can be used directly on teeth to drill out decay. This announcement was good news for PREMIER LASER SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PLSIU/PLSIA)") else Response.Write("(Nasdaq: PLSIU/PLSIA)") end if %> which makes the Centauri erbium YAG laser. According to the company, fewer patients will require anesthetic for fillings. The company estimates it will sell 10,000 to 15,000 of the $39,000 laser systems in the next decade. Before rushing out to do anything, however, I recommend you do your homework and read TMF Templr's article in The Evening News 5/09/97. For the week, Premier Laser 'A' shares were up $6 1/4 (90.9%), closing on Monday at $13 1/8.

OLSTEN CORPORATION <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OLS)") else Response.Write("(NYSE: OLS)") end if %> in a press release this week said the New Mexico Health Care Anti-Fraud Task Force is looking into allegations of improper billing and fraud against federally-funded medical assistance programs on the part of Quantum Health Resources, which Olsten acquired in June 1996, and its post-acquisition successor, Olsten Health Services Infusion Therapy Division. The company said it understands most of the period at issue in the investigation (January 1992 - April 1997) predates Olsten's acquisition of Quantum. They have also provided information to various agencies, including the U.S. Department of Justice and the Office of the Attorney General of New Mexico, which are inquiring into certain health care practices of Quantum. For the week, Olsten was down $5/8 (3.4%), closing at $17 3/4.

INTERNEURON PHARMACEUTICALS, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IPIC)") else Response.Write("(Nasdaq: IPIC)") end if %> announced that the Drug Enforcement Agency (DEA) has published a recommendation for the removal of fenfluramine and its isomers, including dexfenfluramine, from Schedule IV and all other controls of the Controlled Substances Act. Dexfenfluramine is the active ingredient in Redux, a prescription anti-obesity drug marketed by the Wyeth-Ayerst division of AMERICAN HOME PRODUCTS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AHP)") else Response.Write("(NYSE: AHP)") end if %>. If approved, the new status would simplify prescription writing and eliminate refill limits.

Interneuron petitioned the DEA to remove fenfluramine and its isomers from the agency's list of controlled substances in March 1991. In September 1995, a joint committee of the Endocrinologic and Metabolic Advisory Committee and the FDA Drug Abuse Advisory Committee voted to recommend removal of flenfluramine and its isomers from Schedule IV and all other DEA controls. The DEA is expected to issue a final rule following a comment period. I am always awestruck at the lightning pace of the federal regulatory process.

On Monday, May 12, The Wall Street Journal ran an article saying sales for Redux had gone flat, which probably accounts for the $1 1/4 drop in the stock price Monday. For the week, Interneuron was down $1 (6.0%), closing at $15 3/4, while American Home Products was up $1 1/2 (2.1%), closing at $71 3/4.

American Home Products received some more good news from the FDA this week when the agency refused to clear generic versions of the menopausal drug Premarin for marketing. Premarin is the brand name for conjugated estrogens derived from the urine of pregnant mares (you know, sometimes you're just better off not knowing some things) and it contains a number of different estrogens. It is the most widely prescribed drug in the U.S. and is made by Wyeth-Ayerst, a division of American Home Products. Both BARR LABORATORIES, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: BRL)") else Response.Write("(AMEX: BRL)") end if %> and DURAMED PHARMACEUTICALS, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DRMD)") else Response.Write("(Nasdaq: DRMD)") end if %> had been hoping to offer generic versions of the drug.

In announcing the decision, Janet Woodcock, M.D., director of the FDA's Center for Drug Evaluation and Research, said: "Based on currently available data, there is at this time no way to assure that synthetic generic forms of Premarin have the same active ingredients as the brand-name drug. This is essential for determining they are equivalent to the brand drug, and is also a legal requirement for their approval."

Barr's Chairman, President, and CEO, Bruce L. Downey said, "FDA's action represents the triumph of politics over science. Wyeth-Ayerst Laboratories has used its influence in the political and marketing arenas to unfairly extend its product monopoly at the expense of American consumers." A Barr press release stated Downey confirmed that Barr would continue its efforts to break Wyeth-Ayerst's "stranglehold on this important medicine."

A press release issued by Duramed quoted its CEO, E. Thomas Arington, as saying, "We are now seriously and expeditiously evaluating all options before us to bring this product to the women of America and the world, and will make additional announcements as we move forward." Duramed has had an application for generic conjugated estrogens pending since September 1994. Both stocks were hammered following the announcement. For the week, Barr Labs was down $15 3/8 (35.5%), closing on Monday at $27 7/8, while Duramed was down $6 1/4 (60.2%), closing at $4 1/8.

Senior managers of ALLEGIANCE CORPORATION <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AEH)") else Response.Write("(NYSE: AEH)") end if %> and its subsidiaries have purchased 2.4 million shares, or approximately $54.8 million, of the companies stock under a plan to align executives' personal interests more closely with those of shareholders and with the companies financial performance. The 141 executives -- including all of the company's officers -- took out full-recourse, five-year personal loans to purchase the newly issued shares at the May 2, 1997 closing price of $23 1/4. If a manager sells the purchased shares within the first three years, he or she would only receive 50% of any gain while being at risk at all times for any decline in market price. The stock climbed $3 on the May 5 announcement and for the week, Allegiance was down $3/8 (1.4%), closing on Monday at $25 7/8.

PHYSICIAN SALES AND SERVICES, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PSSI)") else Response.Write("(Nasdaq: PSSI)") end if %> announced preliminary operating results for the fourth quarter, saying it expects to have a loss of 5 cents to 7 cents a share as a result of acquisition-related charges (actual results are expected to be released May 27, 1997). Analysts expected Physician Sales to earn $0.15 a share and the May 5 announcement dropped the stock from $14 to $12 1/16 with almost 4 million shares traded (the stock had been as low as $8 at one point during the day). For the week, Physician Sales was up $1 (8.3%), closing on Monday at $13 1/16.

INTEGRATED HEALTH SERVICES INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IHS)") else Response.Write("(NYSE: IHS)") end if %> reached a settlement with CORAM HEALTHCARE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CRH)") else Response.Write("(NYSE: CRH)") end if %> for termination of their planned merger and agreed to pay Coram $21 million to cover fees and expenses. For the week, Integrated Health was down $7/8 (2.5%), closing at $34 1/8, while Coram was up $1/4 (10.5%), closing at $2 5/8.

It was a busy week for TRANSITIONAL HOSPITALS CORPORATION <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: THY)") else Response.Write("(NYSE: THY)") end if %>. First the company announced that it had entered into a definitive merger agreement with Select Medical Corporation, a closely held group, whereby Transitional shareholders would receive $14.55 per share, or $564.5 million, in cash upon consummation of the merger. The deal included a requirement to pay Select a $19.4 million break-up fee if it terminated the agreement with Select. That news on May 5 sent the stock from $10 to $14 1/4.

Then, on May 7, VENCOR INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VC)") else Response.Write("(NYSE: VC)") end if %> offered to acquire Transitional Hospitals for $16 a share, or $639 million, and Transitional said it will "hold a Board of Directors meeting within the next several days to fully consider Vencor Inc.'s offer."

On May 9, the company announced that the Board of Directors "has authorized management to initiate discussions with Vencor." In addition, Transitional's CEO stated, "While the Board and its advisors have concerns regarding antitrust issues, as well as other provisions of the offer, we look forward to meeting with Vencor at their earliest convenience." For the week, Transitional Hospitals was up $1 1/4 (8.8%), closing on Monday at $15 1/2 while Vencor was down $5 1/8 (12.0%), closing at $37 3/4.

LIVING CENTERS OF AMERICA, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LCA)") else Response.Write("(NYSE: LCA)") end if %>, GRANCARE, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GC)") else Response.Write("(NYSE: GC)") end if %>, and Apollo Management, L. P. announced a recapitalization and merger transaction valued at approximately $1.8 billion. It will create the second-largest long-term care provider in the country. In addition to long-term care, the company will provide pharmaceutical and rehabilitation services, assisted living, and geriatric specialty health care services nationwide.

The following is taken from the press release announcing the deal (WARNING: this reads like a GMAT curve breaker question): "Under the terms of the agreements, Living Centers of America shareholders will receive $40.50 per share in cash for 93% of the outstanding Living Centers of America common stock and will retain the remaining 7% of such stock in a recapitalization. Each Living Centers of America share will be converted into approximately $37.67 in cash plus 0.07 shares in the new company. As part of the recapitalization, Apollo will invest $200 million to purchase approximately 4.94 million newly issued shares of Living Centers of America common stock at the $40.50 per share price. Upon completion of the recapitalization, GranCare will merge with Living Centers of America. In the merger, each outstanding share of GranCare common stock will be exchanged for 0.2469 shares of common stock of the recapitalized Living Centers of America. Based upon the $40.50 Apollo buy-in price, GranCare shareholders will receive stock in the new entity valued at $10 per share (resulting in a premium of approximately 30%) and representing 49.5% of the new company. Apollo will own approximately 39.3% of the new company and Living Centers of America current shareholders will own the remaining 11.2%" (Does anybody else have a headache?).

For the week, Living Centers of America was up $3/4 (2.0%) closing Monday at $37 5/8, while GranCare was up $1 1/4 (16.1%) closing at $9.

The Wall Street Journal reports Sweden's Incentive AB offered to pay $1.59 billion for VIVRA INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: V)") else Response.Write("(NYSE: V)") end if %>, which would create one of the world's biggest kidney-care groups. Incentive plans to bid $35.62 per share for Vivra, the second largest provider of dialysis services in the U.S. and would sell Vivra's physician network and disease management division to a buyout firm for $85 million. The deal is subject to incentive acquiring a majority stake in Vivra as well as antitrust reviews in both Europe and the U.S. For the week, Vivra was unchanged, closing on Monday at $35.

On May 6, Reuters Medical News carried an item that PHYSICIANS HEALTH SERVICES, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PHSV)") else Response.Write("(Nasdaq: PHSV)") end if %> was up for sale and interested buyers included FOUNDATION HEALTH SYSTEMS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FHS)") else Response.Write("(NYSE: FHS)") end if %>. The article went on to say that an article in Managed Care Week stated Foundation was interested in the purchase to aid its Northeast expansion and had made an offer of around $27 per share "but the Greater Bridgeport IPA, which controls more than 50% of PHS votes, wants at least $30 per share." The same day, The Wall Street Journal reported that Foundation had made an offer of $30 a share and that neither company would comment. On May 8, Foundation announced that it had reached a definitive agreement to purchase Physicians for $29.25 per share in cash. Physicians Health Services is a 440,000-member health plan with operations in the New York metropolitan area, including Northern New Jersey and throughout Connecticut. For the week, Foundation was up $1/8 (0.5%) closing Monday at $27 7/8, while Physicians Health was up $4 5/8 (20.2%), closing at $27 1/2.

A panel of FDA advisors voted 6-3 against recommending approval of CEPHALON INC.'s <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CEPH)") else Response.Write("(Nasdaq: CEPH)") end if %> drug Myotrophin as a treatment for Lou Gehrig's disease (amyotrophic lateral sclerosis (ALS)). Although the recommendation is not the final decision, the FDA usually follows the advice of its expert panels. Both Cephalon and its partner CHIRON CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CHIR)") else Response.Write("(Nasdaq: CHIR)") end if %> said they haven't given up on the drug and will continue to attempt to gain FDA approval. For the week, Cephalon was down $8 1/4 (40.0%), closing Monday at $12 3/8, while Chiron was down $1 1/2 (7.5%), closing at $18 1/2.

EARNINGS REPORTS

OXFORD HEALTH PLANS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: OXHP)") else Response.Write("(Nasdaq: OXHP)") end if %> reported first quarter net income of $34.4 million, or $0.42 a share (two cents better than estimates), on revenues of $987.3 million, compared to 1996 first quarter net income of $18.5 million, or $0.25 a share, on revenues of $658.2 million. The company's overall medical loss ratio for the first quarter was 80.2%, compared to 79.9% for the same period last year and the health administrative ratio was 15.4%, compared to 16.4% last year For the week, Oxford was up $1 1/2 (2.3%), closing Monday at $66. (You can read a synopsis of the 05/06/97: Oxford Health Q1 Conference Call in the Conference Calls area of the Fool).

PHYSICIAN CORPORATION OF AMERICA <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PCAM)") else Response.Write("(Nasdaq: PCAM)") end if %> reported first quarter net income of $4.6 million, or $0.12 a share (9 cents higher than estimates), on revenues of $365.5 million, compared to a 1996 first quarter loss of $4.9 million, or $0.13 a share, on revenues of $378.9 million. The company's overall medical loss ratio for the first quarter was 87.1%, compared to 87.4% for the same period last year and the health administrative ratio was 12.5%, compared to 16.4% last year. For the week, Physician Corp. was down $7/16 (8.0%), closing Monday at $5 1/16.

HOME HEALTH CORPORATION OF AMERICA, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HHCA)") else Response.Write("(Nasdaq: HHCA)") end if %> reported third quarter net income of $1.8 million (excluding extraordinary charges of $300,000 or 2 cents a share), or $0.20 a share (meeting estimates), on revenues of $42.3 million, compared to 1996 third quarter net income of $1.1 million, or $0.14 a share, on revenues of $24.8 million. For the week, Home Health was up $3/16 (2.1%), closing Monday at $9 1/16.

UNITED HEALTHCARE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UNH)") else Response.Write("(NYSE: UNH)") end if %> reported first quarter net income of $108.9 million, or $0.54 cents a share (meeting estimates), on revenues of $2.85 billion, compared to 1996 first quarter net income of $118.9 million, or $0.62 cents a share, on revenues of $2.3 billion. Their medical loss ratio for the first quarter was 84.4%, compared to 82.8% last year and selling, general and administrative (SG&A) cost ratio was 20.2%, compared to 21.9% last year. For the week, United was up $2 3/8 (4.8%), closing Monday at $51 3/8.

MEDPARTNERS, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MDM)") else Response.Write("(NYSE: MDM)") end if %> reported first quarter net income of $40.5 million, or $0.25 a share (meeting estimates), on revenues of $1.33 billion, compared to 1996 first quarter net income of $26.7 million, or $0.18 a share, on revenues of $1.15 billion. For the week, MedPartners was down $7/8 (4.5%), closing Monday at $18 3/4.

MARINER HEALTH GROUP, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MRNR)") else Response.Write("(Nasdaq: MRNR)") end if %> reported first quarter net income of $6.8 million, or $0.23 a share (a cent higher than estimates), on revenues of $174.4 million, compared to 1996 first quarter net income of $6.1 million (before merger and other non-recurring charges), or $0.21 a share, on revenues of $1.4 million. For the week, Mariner was up $1 1/2 (14.1%), closing Monday at $12 1/8.

GENESIS HEALTH VENTURES INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GHV)") else Response.Write("(NYSE: GHV)") end if %> reported second quarter net income of $13.5 million, or $0.37 a share (meeting estimates), on revenues of $273.3 million, compared to 1996 second quarter net income of $7.8 million, or $0.30 a share, on revenues of $154.7 million. For the week, Genesis was down $1 1/8 (3.4%), closing Monday at $31 5/8.

INTERNEURON PHARMACEUTICALS, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IPIC)") else Response.Write("(Nasdaq: IPIC)") end if %> reported a second quarter loss of $7.9 million (including $2.3 million for the purchase of in-process research and development by purchasing stock of Intercadia, Inc., a majority-owned subsidiary), or $0.19 a share (8 cents better than estimates) on revenues of $19.8 million, compared to a 1996 second quarter loss of $12.0 million, or $0.34 a share, on revenues of $905,000. For the week, Interneuron was down $1 (6.0%), closing Monday at $15 3/4 (There was other news on Interneuron above).

MAGELLAN HEALTH SERVICES, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MGL)") else Response.Write("(NYSE: MGL)") end if %> reported second quarter net income of $13.2 million (adjusted for stock option expense and unusual items), or $0.46 a share (a cent higher than estimates), on revenues of $349.9 million, compared to 1996 second quarter net income of $20.4 million (including 5.0 million or 9 cents a share related to interest income on a state tax refund), or $0.59 cents a share, on revenues of $355.0 million. For the week, Magellan was unchanged, closing Monday at $26 3/4.

SIERRA HEALTH SERVICES, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SIE)") else Response.Write("(NYSE: SIE)") end if %> reported first quarter net income of $9.8 million (excluding merger-related expenses of $8.4 million ($0.47 cents a share), net of tax effects, relating to the potential merger with Physician Corporation of America which has been terminated), or $0.55 cents a share (a cent higher than estimates), on revenues of $171 million, compared to 1996 first quarter net income of $10.2 million, or $0.58 cents a share, on revenues of $136 million. For the week, Sierra was up $2 3/8 (8.7%), closing Monday at $29 3/4.

TRIGON HEALTHCARE INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TGH)") else Response.Write("(NYSE: TGH)") end if %> reported first quarter net income of $29.2 million, or $0.29 cents a share (on a pro forma basis excluding realized gains and an extraordinary item - a cent higher than estimates), on revenues of $511.8 million, compared to 1996 first quarter net income of $23.2 million, or $0.22 cents a share, on revenues of $470.2 million. The company's medical loss ratio was 84.1%, compared to 83.2% last year and SG&A expense ratio was 12.8%, compared to 13.7% last year. For the week, Trigon was up $5/8 (3.3%), closing Monday at $19 5/8.

HEALTHCARE COMPARE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HCCC)") else Response.Write("(Nasdaq: HCCC)") end if %> reported first quarter net income of $20.8 million, or $0.61 cents a share, on revenues of $65.0 million, compared to 1996 first quarter net income of $19.0 million, or $0.53 cents a share, on revenues of $60.0 million. For the week, HealthCare COMPARE was unchanged, closing Monday at $43 7/8.

OMEGA HEALTH SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: OHSI)") else Response.Write("(Nasdaq: OHSI)") end if %> reported first quarter net income of $552,000, or $0.08 a share, on revenues of $12.3 million, compared to 1996 first quarter net income of $122,000, or $0.03 a share, on revenues of $8.9 million. For the week, Omega was up $3/4 (1.2%), closing Monday at $7 1/4.

PHYSICIANS HEALTH SERVICES INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PHSV)") else Response.Write("(Nasdaq: PHSV)") end if %> reported first quarter net income of $646,000, or $0.07 a share, on revenues of $151.0 million, compared to 1996 first quarter net income of $866,000, or $0.09 a share, on revenues of $113.4 million. For the week, Physicians Health was up $4 5/8 (20.2%), closing Monday at $27 1/2. (As reported above, it was also announced this week that Foundation Health Systems Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FHS)") else Response.Write("(NYSE: FHS)") end if %> has agreed to purchase Physicians Health for $29.25 per share).

ARBOR HEALTH CARE COMPANY <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AHCC)") else Response.Write("(Nasdaq: AHCC)") end if %> reported first quarter net income of $2.5 million, or $0.36 a share (a cent higher than estimates), on revenues of $59.5 million, compared to 1996 first quarter net income of $2.0 million, or $0.29 a share, on revenues of $52.5 million. For the week, Arbor was up $2 (8.0%), closing Monday at $26 3/4.

VALUE HEALTH, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VH)") else Response.Write("(NYSE: VH)") end if %> reported first quarter net income of $19.2 million, or $0.35 a share (two cents lower than estimates), on revenues of $478.5 million, compared to 1996 first quarter net income of $19.1 million, or $0.35 a share, on revenues of $490.8 million. For the week, Value Health was up $1/8 (0.6%), closing Monday at $20 1/8.

ICN PHARMACEUTICALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ICN)") else Response.Write("(NYSE: ICN)") end if %> reported first quarter net income of $22.3 million, or $0.50 a share ($0.21 lower than estimates), on revenues of $159.0 million, compared to 1996 first quarter net income of $22.0 million, or $0.65 a share, on revenues of $138.1 million. For the week, ICN was down $7/8 (3.9%), closing Monday at $21 1/2.

INPHYNET MEDICAL MANAGEMENT INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IMMI)") else Response.Write("(Nasdaq: IMMI)") end if %> reported first quarter net income of $5.0 million, or $0.30 a share (meeting estimates), on revenues of $122.5 million, compared to 1996 first quarter net income of $3.7 million, or $0.23 a share, on revenues of $87.9 million. For the week, InPhyNet was down $1 1/8 (4.5%), closing Monday at $23 7/8.

MEDICAL RESOURCES, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MRII)") else Response.Write("(Nasdaq: MRII)") end if %> reported first quarter net income of $3.6 million, or $0.18 a share (a cent higher than estimates), on revenues of $40.6 million, compared to 1996 first quarter net income of $1.3 million, or $0.16 a share, on revenues of $18.0 million. For the week, Medical Resources was up $3/8 (2.9%), closing Monday at $13 1/8.

That will wrap it up for this week. Please share any comments/suggestions on how to improve this feature via e-mail (TMF [email protected]). Also let me know if you would like the update forwarded to your email address. In the meantime, here is hoping your investments are healthy!

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