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Week of May 20, 2024

HEADLINE NEWS Therapeutic Footwear not Beneficial to Some Diabetics, Study Finds SEATTLE--Therapeutic footwear does not necessarily benefit diabetics with sensitive feet, according to a study published last week in the Journal of the American Medical Association. The two-year study, which followed 400 Washington-area diabetes patients with a history of foot ulcers--mainly men ages 45 to 84 years from the Veterans Affairs Puget Sound Health Care System--divided the patients into three groups. One group wore therapeutic shoes containing customized, medium-density cork inserts with a neoprene closed-cell cover. Another group wore therapeutic shoes containing prefabricated, tapered polyurethane inserts with a brushed nylon cover; and a third group wore "their usual footwear," the article explained. All three groups received "careful attention to foot care" from health care professionals, and none of the participants had severe foot deformities. At the end of two years, researchers found that the rate of reulceration among the three groups was virtually the same. While the overall rate of reulceration was low--15 percent in the cork-insert group, 14 percent in the prefabricated-insert group and 17 percent in the control group--"patients assigned to therapeutic shoes did not have a significantly lower risk of reulceration [than did patients in the control group]," the researchers concluded. Moreover, the level of medical care that patients received seemed to influence foot health more than did the type of footwear the patients wore, the researchers said. But these findings "do not negate the possibility that special footwear is beneficial in persons with diabetes who do not receive such close attention to foot care by their health care providers, or in individuals with severe foot deformities," the researchers added. These results raised questions and a few eyebrows among pedorthists, therapeutic-footwear manufacturers and other podiatric researchers. Jim Foto, a biomedical research engineer and pedorthist at the Baton Rouge, La.-based National Hansen's Disease Program, wondered why the study's authors did not explain the meaning of "usual footwear." "There is no description of the control group's footwear," he said. "In many instances, a person's own footwear is the best condition." Often, patients with diseases like diabetes--diseases that can cause a loss of protective sensation in the feet, called neuropathy--already wear softer, less damaging shoes, which could be considered therapeutic, Foto explained. Consequently, this study's authors may be comparing oranges to oranges. "If you told me a woman is coming off the street who has diabetes and is still wearing 3-inch heels, I'd say we would see a different outcome [compared to a woman using therapeutic footwear]," he continued. "On the men's side, if you saw a man with diabetes who was wearing cowboy boots as his own footwear, we also would see a different outcome." Additionally, the fact that none of the study's participants had foot deformities is significant, Foto said. "In our research, we see a more radical change when there is foot deformity, as opposed to no foot deformity," he added. In fact, a diabetes patient with no foot deformity, who has not yet lost protective sensation in his feet, may not need custom footwear, Foto admitted. However, "whenever a person has a loss of protective sensation, that's when [he or she] should always be wearing therapeutic footwear." Russell Volpe, a professor at the New York College of Podiatric Medicine and medical director of the Deer Park, N.Y.-based therapeutic footwear manufacturer Langer Biomechanics Group, wondered why the VA researchers chose to study cork and polyurethane inserts rather than the widely used "plastazote" (closed-cell polyethylene foam/open-cell urethane foam) substance that many in the therapeutic-footwear industry have accepted as the standard of care. While not commenting directly on the VA study's findings, Bob Fox, who is vice president of sales and marketing at Atlantic Footcare in North Smithfield, R.I., pointed to a 1997 study conducted at the University of Texas in San Antonio, which concluded that therapeutic shoes and insoles are beneficial to foot ulcer-prone diabetes patients. The Texas study used insoles manufactured by Atlantic Footwear, and "prompted us to get into the [therapeutic footwear] business," Fox said. Ultimately, no one study can be 100 percent conclusive, Foto said. While the VA study draws some interesting conclusions, it also raises further questions. " I applaud [the study's lead author] Doctor Reiber and her coworkers, because they're doing great work," he said, but additional research is necessary. "Maybe the wheel doesn't need to be reinvented, but beyond that, I think everything else can be improved." To read the VA study, entitled "Effect of Therapeutic Footwear on Foot Reulceration in Patients with Diabetes," go to http://jama.ama-assn.org.

PROVIDER NEWS Option Care Acquires Infusion Pharmacy BANNOCKBURN, Ill.--Option Care has acquired Buffalo, N.Y.-based Springville Pharmacy Infusion Therapy, a provider in western New York, for $3.6 million in cash. The acquisition, which will be immediately accretive to Option Care's earnings, will generate approximately $4 million in annual revenue and will add 2 cents per share to Option Care's stock during 2003, according to an Option Care press release. Three Firms Merge to Form Dependable Health Services TUCSON, Ariz.--Three companies in southern Arizona--including two arms of Carondelet Health Network's home health and medical equipment services, and Dependable Nurse--have merged to form Dependable Health Services. The combined company will serve more than 3,500 home care patients and medical equipment customers, and will employ more than 400 people, according to a Dependable press release. Consolidating operations, the three companies will move their headquarters to one Tucson location, where a showroom for medical and rehabilitation equipment already is located. Gentiva Announces First Quarter Results and Acquisition Clearance MELVILLE, N.Y.--After an accounting charge related to the company's adoption of FAS 142 (Goodwill and Other Intangible Assets), Gentiva Health Services reported a net loss for the quarter ended March 31, 2002, of $209,194, or a loss of $7.72 per diluted share, compared to a net income of $6.1 million, or 26 cents per diluted share, for the same quarter in 2001. Revenue for the quarter rose 3 percent to $369.6 million, compared to $357.2 million for the same period in 2001. The company also announced it had received clearance from the Securities and Exchange Commission to purchase Accredo Health's specialty pharmaceuticals division for $415 million. Gentiva expects its shareholders to vote on the proposed transaction on June 12. Transworld Healthcare Reports Q2 Results NEW YORK--For the second quarter ended March 31, 2002, Transworld Healthcare reported a net income of $1,626, or 9 cents per diluted share, compared to a net loss of $448, or a loss of 3 cents per diluted share, for the same quarter in 2001. Revenue for the second quarter was $61,884, compared to $35,917 for the same quarter in 2001. MANUFACTURER NEWS Schering-Plough Announces FDA Probe and Possible Resolution KENILWORTH, N.J.--On May 15, Schering-Plough announced that the U.S. Food and Drug Administration had launched a formal criminal investigation into problems with "Good Manufacturing Practices," or GMPs, at the company's Puerto Rico- and New Jersey-based plants. After the announcement, the company's stock price fell 12.6 percent, to a five-year low of $24.90. Two days later, Schering-Plough announced it had reached an agreement with the FDA for a consent decree to resolve these problems. Under the terms of the consent decree, the company will pay a total of $500 million to the U.S. government, in two equal installments of $250 million--due during the second quarter of 2002 and the second quarter of 2003, respectively. Additionally, if Schering-Plough fails to comply with the terms of the consent decree by the specified deadline, the company must pay $15,000 every day until it complies with the mandates. These late charges cannot exceed $50 million incurred during any calendar year, and have an overall cap of $175 million. While Schering-Plough agreed to obtain outside experts to improve its manufacturing practices, the company said that the facilities in question will remain open and will continue to manufacture human pharmaceutical products. The company noted it would suspend production of certain animal-health products at its Puerto Rico facility and would discontinue manufacturing of certain older products. Additionally, the company agreed to recall certain older products, including its albuterol sulfate-based Proventil Repetabs, which have not been available on the market since June 2001. The recall does not affect Proventil inhalers. In light of these agreements, the company lowered its earnings projection for 2002 and explained that rigorous controls and inspection requirements "may periodically affect the timing of the company's shipments of certain pharmaceutical products to the U.S. market." Nonetheless, Richard Jay Kogan, Schering-Plough's chairman and chief executive officer, remained optimistic. "We are confident of our ability to move forward under the agreement and complete our improvement programs successfully." FDA Finds Problems with Abbott Diagnostics Facility ABBOTT PARK, Ill.--After investigating Abbott Laboratories' Lake County diagnostic manufacturing facility, the U.S. Food and Drug Administration determined that the facility does not comply with the Quality System Regulation, or QSR, according to an Abbott press release. The investigation, which the FDA conducted according to a consent decree agreement with Abbott, concluded in January 2002. "We are obviously deeply disappointed with the decision," said Richard Gonzalez, president and chief operating officer of Abbott's Medical Products Group. "We remain committed to ensuring that the quality system meets the agency's expectation and that the diagnostic products impacted by the consent decree are made available to patients, laboratories and hospitals as soon as possible." As soon as Abbott has a chance to review the FDA's decision--and to learn what, if any, penalties the decision includes--the company will determine whether to change its 2002 earnings predictions, Abbott said. Coloplast Sells Consumer Products Unit to Johnson & Johnson COPENHAGEN--Danish medical supplies manufacturer Coloplast last week announced plans to sell its consumer products unit--which includes the company's Compeed brand of sports dressings--to New Brunswick, N.J.-based Johnson & Johnson. While costs associated with the sale may affect Coloplast's profit-and-loss account negatively during the remainder of 2002, Coloplast said it expects to earn a net profit of $18.57 million from the sale. Moreover, the sale of Coloplast's consumer activities "does not change Coloplast's long-term objective of reaching a turnover in 2005 of [approximately $123.8 million] and reaching a 17 percent profit margin," the company said. Coloplast disclosed no further terms of the deal. ResMed Acquires Servo Magnetics SAN DIEGO--ResMed has acquired Servo Magnetics of Canoga Park, Calif.--a company that manufactures electric motors for ResMed's flow generator systems--for approximately $32 million. Funded through a combination of cash and restricted ResMed common stock, the acquisition qualified as a tax-free reorganization under U.S. tax law and will be accretive after June 30, 2002, according to a ResMed press release. Servo's founder the chief executive officer, Leslie Hoffman, will continue as chief executive officer of Servo, and "we look forward to even closer collaboration with Les and his team, while securing a reliable, cost-effective source of supply for one of the most critical and expensive components of ResMed's medical products," said Peter Farrell, ResMed's chairman and chief executive officer. Cardinal Health Agrees to Acquire Boron, LePore & Associates DUBLIN, Ohio and WAYNE, N.J.--Cardinal Health has agreed to acquire Boron, LePore & Associates, a company that provides medical education to the health care industry. The two-step acquisition will require Cardinal to make a cash tender offer to acquire all of BLP's outstanding shares for $16 per share. Subsequently, the companies will merge and holders of BLP's remaining outstanding stock will receive $16 per share in cash. Cardinal expects to complete the deal by the first quarter of fiscal year 2003. Allied Healthcare Products Reports Q3 and Nine Months Results ST. LOUIS--For the third quarter ended March 31, 2002, Allied Healthcare Products reported a net income of $28,578, or 0 cents per diluted share, compared to a net profit of $40,343, or 1 cent per diluted share, for the same period in 2001. The company reported a net loss of $384,961, or a loss of 5 cents per diluted share, for the nine-month period ended March 31, 2002, compared to a net loss of $396,896, or a loss of 5 cents per diluted share, for the same period in 2001. Revenue for the quarter was $15.2 million, compared to a third quarter 2001 revenue of $16.6 million. Additionally, nine-months revenue was $44.7 million, compared to $48.4 million for the same period in 2001. Sharps Compliance Announces Third Quarter, Nine Months Results HOUSTON--For the third quarter ended March 31, 2002, Sharps Compliance reported a net income of $3,618, or 0 cents per share, compared to a net income of $184,714, or 2 cents per share, for the quarter ended March 31, 2001. For the nine-month period ended May 14, 2002, the company reported a net loss of $590,289, or a loss of 6 cents per diluted share, compared to a loss of $501,928, or a loss of 6 cents per diluted share, for the same period in 2001. Third quarter revenue was $1.8 million, compared to a revenue of $1.2 million for the same period in 2001; and nine-months revenue was $5.0 million, compared to a revenue of $3.3 million for the same period in 2001.

SOURCES SAY WASHINGTON--Apparently contrite after a run-in with leaders of the U.S. House Small Business Committee last month--a logistical disagreement that resulted in his refusal to testify before the committee--Tom Scully, administrator of the Baltimore-based Centers for Medicare and Medicaid Services, apologized for his actions. "I want to apologize to you, Mr. Chairman, and members of the committee, as well as the others who participated in your hearing last month, for the events of April 10," he said. "These events had the unfortunate effect of shifting the focus away from what you and I care about--small business providers." Scully went on to explain his stance on regulatory relief for small business providers. "Since I took over as CMS administrator, my number one priority has been to improve the agency's responsiveness and make it a better business partner. At CMS, we are committed to simplifying our rules, making them easier to understand and less burdensome." CHICAGO--Despite the image that healthy baby-boomer icons like Jane Fonda have projected, most Americans ages 38 to 56 are taking only small steps toward good health as they age, according to a recent study from the Washington-based Alliance for Aging Research. "The Boomer generation's credo seems to be: The heart is willing, but the flesh is weak," says Daniel Perry, the Alliance's executive director. "Unfortunately for many Boomers, they are about to have a close encounter of the most serious kind with diseases associated with aging. Mentally and physically, they're not ready." Half of the baby boomers the Alliance polled confessed that they are not eating as well as they should, but one in three said that they would act to alter their diets if diagnosed with a disease. Forty-three percent of those polled said they would rather eat what they want--and live only 10 additional years--than change their diet significantly. At the same time, baby boomers fear losing attractiveness and contracting a debilitating disease, and they are not confident about their ability to manage their own health concerns as they age, the Alliance reported. WASHINGTON--As employers shift the burden of health care costs to their employees, workers are returning to health maintenance organizations, according to a study published this month in the journal Health Affairs. "While HMOs have taken a beating in the court of public opinion in recent years, this study should remind employers and policymakers that costs count for many consumers and that a significant number of people are willing to accept less choice in return for lower costs," said Paul Ginsburg, president of the Center for Studying Health System Change, the organization that conducted the research. The study found that, if given a choice among different types of health plans, people consider cost before health status. Almost two-thirds--or 63.3 percent--of people enrolled in HMOs said they were willing to trade more choice for lower costs, while 48 percent of people enrolled in non-HMO plans were willing to restrict choice in exchange for lower costs, the study said.

INDUSTRY BRIEFS Jean King has joined The VGM Group, Waterloo, Iowa, as director of manufacturer contracting. Previously, King worked in the contracting department for Lubbock, Texas-based The MED Group. IN OTHER NEWS The Health Privacy Project, part of Georgetown University's Institute for Health Care Research and Policy, has released revised summaries of the health privacy mandates of nine states: Arkansas, Arizona, Colorado, District of Columbia, Florida, Idaho, Michigan, Minnesota and New York. The Project expects to release additional revised state summaries during the next few months. The updated summaries are available at http://www.healthprivacy.org. Up-Lift Technologies of Halifax, Nova Scotia, has received the 2001 Canadian Adaptive Seating and Mobility Association Award for its StumpRest product. The StumpRest is a two-in-one wheelchair drop base with slide-out supports for the stumps of below-knee amputees. CORRECTION: Last week's issue of HomeCare Monday reported incorrectly that the U.S. Food and Drug Administration will require all aqueous-based inhalation drug manufacturers to submit a supplemental abbreviated new drug application, to comply with an impending sterile rule. In actuality, the FDA will require such an application only for inhalation drugs that currently are manufactured non-sterile.

STOCKS Company High Low PE Ratio 5/10/02 5/17/02 Change Abbott Laboratories 58.00 44.05 27.40 51.25 47.60 (3.65) Allied Healthcare (AHPI) 5.30 3.00 171.67 5.13 5.10 (0.03) American HomePatient (AHOM.OB) 1.70 0.28 N/A 0.53 0.45 (0.08) AmerisourceBergen (ABC) 79.70 51.06 30.29 75.42 77.60 2.18 Apria Healthcare (AHG) 29.85 19.50 16.78 24.73 23.96 (0.77) Cardinal Health (CAH) 77.32 60.30 28.66 67.55 68.78 1.23 CareCentric (CURA) 3.00 0.40 N/A 0.45 0.45 0.00 Chad Therapeutics (CTU) 4.35 1.12 N/A 3.34 3.50 0.16 Coram Healthcare (CRHEQ.OB) 0.76 0.13 N/A 0.42 0.73 0.31 Gentiva Health Services (GTIV) 27.55 15.60 28.99 25.83 25.73 (0.10) Invacare (IVC) 41.25 28.50 34.21 37.59 38.60 1.01 Johnson and Johnson (JNJ) 65.89 48.18 31.37 61.85 61.47 (0.38) Lincare Holdings (LNCR) 34.39 22.25 22.53 31.08 30.86 (0.22) Matria Healthcare (MATR) 40.00 14.71 21.29 20.02 21.25 1.23 McKesson (MCK) 42.09 30.40 26.15 37.82 37.39 (0.43) National Home Healthcare (NHHC) 18.90 5.82 17.17 15.95 14.71 (1.24) Option Care (OPTN) 17.72 8.76 24.10 14.91 14.56 (0.35) Pediatric Services of America (PSAI) 14.10 4.70 12.63 8.45 9.00 0.55 Praxair (PX) 61.11 36.50 22.42 58.70 58.89 0.19 ResMed (RMD) 62.20 28.10 27.25 29.28 28.68 (0.60) Respironics (RESP) 37.88 23.79 26.22 32.50 33.14 0.64 Transworld Healthcare (TWH) 6.80 2.21 N/A 5.00 6.45 1.45 Tyco (TYC) 60.09 15.25 7.59 18.40 21.75 3.35 Walgreen (WAG) 42.40 28.70 41.15 37.71 38.36 0.65

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