WellPoint May Be Rethinking Union With Latest Move
Health Care
by Laurence Darmiento
WellPoint Health Networks Inc. has withdrawn an application to merge with CareFirst Inc. pending the release of an analysis of the proposed $1.3 billion deal by Maryland regulators.
The application was withdrawn in Delaware, one of the states CareFirst operates in. The complicated deal requires regulators in that state, as well as Maryland and the District of Columbia, to review the merger. Company officials said they did not want to incur the expenses of proceeding with the Delaware application until the critical Maryland analysis is released within the next week or so.
“It costs several million dollars in each state,” said Ken Ferber, a spokesman for the Thousand Oaks-based company.
The move is setting off speculation among analysts that WellPoint may be rethinking its deal, given the level of opposition and the possibility that it could be forced to raise its price.
Since the merger was announced nine months ago, Anthem Inc. of Indiana bought Trigon Healthcare, a Virginia insurer, for $4 billion, even though it has only 2.2 million members. By contrast CareFirst has 3.1 million members.
However, Ferber maintained that the deals cannot be compared, since Trigon is a for-profit and CareFirst is a not-for-profit that has to go through a lengthy, public conversion to a for-profit before the deal can be completed.
Already, the Maryland Legislature has passed a law requiring that WellPoint pay all cash for CareFirst, rather than the stock-and-cash deal the two companies had anticipated.
Marina Money
Tenet Healthcare Corp. has lost more than its reputation as a savvy hospital operator when a judge ordered it to keep Daniel Freeman Marina Hospital open. It will have to shell out a few bucks.
The company is offering bonuses to keep employees and transferring workers from other Tenet hospitals so the Marina del Rey facility can stay open despite the fact that the daily patient census has fallen to below two dozen.
Los Angeles Superior Court Judge Dzintra Janavs made her ruling after deciding that Tenet had failed to adequately confer with the community, as required under its purchase agreement, before announcing the closure.
Tenet spokesman David Langness said the company was getting additional community input so it could move ahead with the closure as soon as possible. The company maintains the hospital is losing too much money but community activists are looking for a buyer to save it.
USC Donation
Selim Zilkah, one of L.A.’s wealthiest residents, has given $20 million to USC for completion of a neurogenetic institute that will now bear his name. The Keck School of Medicine is in major expansion mode and the institute, housed in a 125,000 square foot six story building, will focus on Alzheimer’s, multiple sclerosis and other debilitating neurological and psychiatric disorders. The $60 million institute is expected to open in November.
Staff reporter Laurence Darmiento can be reached at (323) 549-5225 ext. 237 or at
[email protected].
