In the Region Average hospital bill up 3.28% to $8,198...

BUSINESS DIGEST

April 11, 2002

In the Region

Average hospital bill up 3.28% to $8,198 in state last fiscal year

The bill for the average hospital stay in Maryland rose 3.28 percent, to $8,198, in the fiscal year that ended June 30, the Health Services Cost Review Commission reported yesterday in its annual review of hospital finances.

That was below the national average, a 4.46 percent rate of increase, the commission reported. The cost of a hospital stay in Maryland is 2.26 percent below the national average.

At the same time, costs were increasing slower than in other states, hospital profits were increasing. As a group, the hospitals logged operating profits of $168.1 million, or 2.9 percent of operating revenue, up from $141.6 million, or 2.7 percent of operating revenue, in the previous fiscal year.

Walker named overseer of Weese bankruptcy cases

The Office of the U.S. Trustee in Baltimore yesterday named Irving E. Walker, a bankruptcy attorney with Saul Ewing LLP, as trustee of the personal bankruptcy cases of the owners of the defunct Bibelot book chain.

Judge James F. Schneider, of U.S. Bankruptcy Court, ordered the appointment of a trustee on Monday after saying he had no confidence that Brian D. and Elizabeth G. Weese would act in the best interests of the chain's creditors. Creditors say the Weeses owe them more than $25 million and accuse the couple of fraudulently transferring millions of dollars into offshore accounts.

Walker's appointment requires Schneider's approval.

Adviser wants Savage off Lockheed's board

Proxy adviser Institutional Shareholder Services has recommended against retaining Frank Savage on Lockheed Martin Corp.'s board of directors, saying he failed as a board member of now-bankrupt Enron Corp.

ISS, which analyzes corporate governance for large investors, said in the analysis that Enron directors face the burden of explaining their behavior during the events that led to the company's eventual bankruptcy. "Otherwise, they are unfit to be a director of Lockheed Martin, or any other public company," the analysis stated.

The International Association of Machinists and Aerospace Workers, Lockheed's largest union, also is urging individual and institutional shareholders to withhold votes for Savage for similar reasons. Savage declined to comment, his attorney said.

S&P gives Magellan a negative outlook

Standard & Poor's yesterday revised its outlook on Columbia-based Magellan Health Services Inc. to negative, while retaining Magellan's B+ credit rating. Charles Titterton, an S&P analyst, said, "Magellan's near-term prospects for a return to the robust operating results it had experienced in the past are poor."

Magellan provides behavioral and mental health coverage for 70 million people. Concerns include lower margins in employee assistance business and a loss in members as Aetna Inc. reduces its membership by discontinuing unprofitable lines. Aetna contracts with Magellan to manage mental health benefits, and is Magellan's largest customer. S&P will review Magellan's credit rating next month, after the company reports another quarter's results, Titterton said.

Erin Somers, a Magellan spokeswoman, said, "There's basically nothing new in their report. It's true we had a disappointing quarter," when it posted in December a 2-cent- a-share loss after analysts had expected earnings of 17 cents. However, she said, the quarter reported in February was "solid."

Allegheny reports OKs for Indiana power plant

Allegheny Energy Inc. said yesterday that its generating and trading subsidiary has received all the regulatory approvals necessary to begin building a 630-megawatt natural gas power plant in St. Joseph County, Indiana.

The Indiana Utility Regulatory Commission ruled that it had no regulatory jurisdiction over the generating facility, which allows the project to move forward.

Allegheny Energy Supply will begin construction of the facility later this month and expects to complete the project by mid-2004. Allegheny already owns 1,710 megawatts of electricity produced in Indiana, Illinois and Tennessee.

325 to lose their jobs at Lockheed space unit

A reduction in the number of external space shuttle fuel tanks being ordered by NASA will cost 325 workers their jobs at Lockheed Martin Space Systems Co., a division of Bethesda-based Lockheed Martin Corp.

The jobs will be eliminated by the end of the year as NASA follows through with a plan to cut the production of tanks from eight to six annually.

The tanks are built at plant in New Orleans that employs about 2,100 workers. Another 90 workers are employed in the project at the Marshall Space Flight Center in Huntsville, Ala., and the Kennedy Space Center in Florida.

Wegmans is planning 3 food stores for area

Wegmans Food Markets Inc., an upscale grocery store chain anchored in Upstate New York, is taking aim at the outskirts of Baltimore and Washington.

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