Subacute Care

Responding to competition from alternative care facilities, Meridian Healthcare Inc. says it will spend up to $87 million in the next five years in an ambitious plan to retool its nursing home facilities and branch off into new businesses.Meridian's planned investment comes as nursing homes, including its own, are losing business to less expensive alternatives such as home health care, assisted living and retirement centers."We felt running a business in the '90s was much more challenging than in the '70s and '80s," said Edward A. Burchell, president and chief executive officer of Meridian.

Stella Maris, one of the area's best-known Roman Catholic long-term-care facilities, will celebrate its 50th anniversary tomorrow with a liturgy service featuring one of Baltimore's top Catholic officials. Bishop William C. Newman will celebrate the Mass at St. Joseph Roman Catholic Church in Cockeysville. Organizers expect about 400 people to attend. Stella Maris, which is Latin for Mary, Star of the Sea, was founded in 1953 by Archbishop Francis Keough. It was originally designed to house elderly members of the archdiocese, said Sister Karen McNally, the facility's chief administrative officer.

St. Joseph Medical Center yesterday dedicated a new 26-bed "transitional care unit" as part of a broad effort by Maryland hospitals to move into subacute care.St. Joseph was one of nine Maryland hospitals licensed by health planners for the new level of care in an experiment mandated by the 1995 session of the legislature.In addition to those nine, eight others also had subacute services approved in the last half of 1995, and three hospitals had been offering such services before the latest rush.

Dr. Robert N. Elkins moved boldly to build Integrated Health Services, the Sparks-based nursing home chain, in barely more than a decade. Now, within a few days, Elkins will be officially leaving the company he founded, in return for a severance package valued at nearly $55 million. He could not be reached for comment. From a start-up, IHS grew to a company with 1,500 nursing homes and other facilities in 47 states, and $3 billion a year in revenue. Along the way, Elkins became known not only for his business strategy, but also for his lavish bonuses - $3.25 million in 1997 - and perks such as his corporate jet. But the company's fortunes quickly went sour in 1998, as Medicare, on which it depended for a third of revenue, cut its payments.

Maryland's hospital rate-setting board approved yesterday a rule change its chairman said was designed to prevent "double-dipping" by hospitals that have subacute care units.At issue is how the rate-setting commission should deal with hospitals offering subacute services -- less intensive than normal hospital care but more intensive than normal nursing home services. Subacute care for rehabilitating patients has been growing rapidly because it costs less -- about $450 per day, compared with $825 for acute hospital care, according to commission staff.

Susan Boyer appointed to realty committeeSusan Boyer, an agent with Hyatt Real Estate, has been appointed to the Property Management Committee of the Anne Arundel County Association of Realtors.Ms. Boyer has been a residential property manager since 1987 and joined Hyatt in March of this year.The committee is responsible for setting standards and creating formats for property managers and real estate agents.R.E. Michel Co. hires marketing specialistThe R.E. Michel Co., a Glen Burnie-based heating, air conditioning and refrigeration distributor, has hired Stephen M. Neathery as marketing specialist, a newly-created position.

Integrated Health Services Inc. of Owings Mills, coming off a year of furious expansion, reported yesterday that its first-quarter profits more than doubled from the same period a year ago.The company also announced yesterday that its board had approved repurchase in the open market of up to $50 million of the company's outstanding stock. The company has 20.7 million shares outstanding.The health care company said its first-quarter net income totaled $13.6 million, or 53 cents per share, up 113 percent from $6.4 million, or 38 cents per share, in the previous period.

When Michael J. Francus applied to build a nursing home in Baltimore in 1988, banks were only too happy to finance a project whose patients were certain to bring government dollars. But by the time he got the necessary approvals from regulators two years later, the government had slashed reimbursement levels, and bankers shut their doors.He was left with the rights to build a 136-bed unit -- and the prospect of a "razor-thin" profit margin. "You don't go in the hole $5 million or $6 million to make $50,000," he decided.

The county's first subacute care unit, for patients too sick to go home but not sick enough to need hospital-level care, will open in January, administrators of Meridian Healthcare said yesterday.Betty B. Betler, the center's administrator, said the 55,000-square-foot facility in Annapolis, combining a 20-bed subacute care unit with a 114-bed nursing home, is about 50 percent completed. Meridian broke ground on the project six months ago."This will bridge the gap between the hospital and home," said Ms. Betler, adding that patients will most likely be referred directly from two county hospitals.

Making money from new acquisitions and higher occupancy in its health-care facilities, Manor Care Inc. reported yesterday a 16.1 percent increase in fourth-quarter net income, capping a year in which profit grew by more than 20 percent.The Silver Spring-based health-care and lodging company said quarterly profits were $26.4 million, or 42 cents a share. Revenue for the fourth quarter rose 14.4 percent, from $309.7 million to $354.2 million.For the year that ended May 31, profit grew 20.6 percent, to $94.5 million, or $1.51 a share.

Manor Care Inc. announced a $2.4 billion merger with Health Care and Retirement Corp. yesterday, forming one of the country's largest nursing home chains.The new company will be called HCR Manor Care and will have headquarters in Toledo, Ohio, where HCR is based.Stewart Bainum Jr., chairman and chief executive officer of Gaithersburg-based Manor Care, will be chairman of the new company, and the board will have five members each from the old Manor Care and HCR boards.The CEO, chief operating officer and chief financial officer of HCR will assume those positions in the merged company.

Integrated Health Services of Owings Mills announced an acquisition yesterday that will make it the country's largest provider of health services people get after they are released from a hospital.Integrated said it will buy Coram Healthcare Corp. of Denver, the country's largest provider of home intravenous drug therapy, for nearly $600 million in stock and assumed debt.This caps a spectacular buying spree for Integrated, virtually doubling the size of the company in less than a year.Just last week, Integrated announced that it had completed a deal to buy First American Health Care of Brunswick, Ga., a large provider of home health care.

Maryland's hospital rate-setting board approved yesterday a rule change its chairman said was designed to prevent "double-dipping" by hospitals that have subacute care units.At issue is how the rate-setting commission should deal with hospitals offering subacute services -- less intensive than normal hospital care but more intensive than normal nursing home services. Subacute care for rehabilitating patients has been growing rapidly because it costs less -- about $450 per day, compared with $825 for acute hospital care, according to commission staff.

St. Joseph Medical Center yesterday dedicated a new 26-bed "transitional care unit" as part of a broad effort by Maryland hospitals to move into subacute care.St. Joseph was one of nine Maryland hospitals licensed by health planners for the new level of care in an experiment mandated by the 1995 session of the legislature.In addition to those nine, eight others also had subacute services approved in the last half of 1995, and three hospitals had been offering such services before the latest rush.

Integrated Health Services Inc., based in Owings Mills, yesterday announced its first-ever exclusive capitation contract with a health maintenance organization.Under a five-year contract with Health Plan of Nevada, a subsidiary of Sierra Health Services, Integrated will receive a monthly fee and promises to provide all subacute care, long-term care and outpatient rehabilitation services for the plan's 136,000 members."This is the future of health care," said Marc B. Levin, senior vice president of Integrated.

The merger of Harbor Health System into Helix Health was approved yesterday by the boards of both companies.Helix will emerge as the largest health-care provider in Maryland.The merger gives Helix a strong foothold in Anne Arundel County, one of the areas it had targeted. Harbor operates the 376-bed Harbor Hospital on South Hanover Street in South Baltimore and plans to open Harbor Health Park on Ritchie Highway in Pasadena in March. Helix already includes four other hospitals in the Baltimore area, and it has a partnership with Medlantic Health Care Group, based in the Washington area.

With earnings up 65 percent in the second quarter, Integrated Health Services Inc. showed yesterday it continues to be the undisputed national leader in post-hospital care.The Hunt Valley firm, which has built a 27-state network of long-term facilities largely by equity-financed acquisitions and management contracts, reported revenues in the quarter that ended June 30 rose 120 percent, to $138.6 million, over the same period last year. Earnings per share rose 33 percent, to 44 cents.The company met or exceeded analysts' estimates and remains seemingly immune from the price wars beginning in other segments of the health industry.

Stella Maris, one of the area's best-known Roman Catholic long-term-care facilities, will celebrate its 50th anniversary tomorrow with a liturgy service featuring one of Baltimore's top Catholic officials. Bishop William C. Newman will celebrate the Mass at St. Joseph Roman Catholic Church in Cockeysville. Organizers expect about 400 people to attend. Stella Maris, which is Latin for Mary, Star of the Sea, was founded in 1953 by Archbishop Francis Keough. It was originally designed to house elderly members of the archdiocese, said Sister Karen McNally, the facility's chief administrative officer.

Making money from new acquisitions and higher occupancy in its health-care facilities, Manor Care Inc. reported yesterday a 16.1 percent increase in fourth-quarter net income, capping a year in which profit grew by more than 20 percent.The Silver Spring-based health-care and lodging company said quarterly profits were $26.4 million, or 42 cents a share. Revenue for the fourth quarter rose 14.4 percent, from $309.7 million to $354.2 million.For the year that ended May 31, profit grew 20.6 percent, to $94.5 million, or $1.51 a share.

Integrated Health Services Inc. of Owings Mills, coming off a year of furious expansion, reported yesterday that its first-quarter profits more than doubled from the same period a year ago.The company also announced yesterday that its board had approved repurchase in the open market of up to $50 million of the company's outstanding stock. The company has 20.7 million shares outstanding.The health care company said its first-quarter net income totaled $13.6 million, or 53 cents per share, up 113 percent from $6.4 million, or 38 cents per share, in the previous period.