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Week of May 6, 2024

SPOTLIGHT Obesity Makes Kids Sick, CDC Says WASHINGTON--Obesity is putting children and adolescents in the hospital and keeping them there longer than ever, according to researchers at the Centers for Disease Control and Preveniton. Since 1977, the rate of obesity-related hospital stays among American children ages six to 17 has more than tripled, the CDC found. Not coincidentally, the researchers noted, the rate of pediatric obesity also has tripled. In studying hospital-discharge data from the National Center for Health Statistics, the CDC also learned that the percentage of diabetes discharges among American children nearly doubled during the past two decades, from 1.43 percent to 2.36 percent. The number of obesity and gallbladder disease-related discharges tripled during the same period, from 0.36 percent to 1.07 percent, and 0.18 percent to 0.59 percent, respectively; and sleep apnea discharges increased fivefold, from 0.14 percent to 0.75 percent, the study said. "These data may suggest that the increasing prevalence of obesity in children and adolescents has led to increased hospital stays related to obesity-associated diseases," the researchers concluded. And, "the higher proportions of hospital discharges of obesity-associated diseases in adolescents than in children, for all of the diseases except sleep apnea, may suggest further that obesity complications increase with age." During the early 80s, obesity-related illnesses kept children in the hospital for an average of 6 days, but by the late 90s, obesity-related illnesses kept children in the hospital for an average of 13 days, the study reported. In fact, by 1999, the length of obesity-related hospital stays outpaced the average length-of-stay for overall discharges, researchers found. As the rates of childhood obesity-related illnesses soared, so did the costs of treating these illnesses. Based on data from discharges that listed obesity as the primary or secondary cause of hospitalization, CDC researchers found that annual hospital costs to treat childhood obesity-related conditions increased 74 percent from 1979 to 1999, from $35 million to $127 million. In light of these and other recent government findings, Tommy Thompson, secretary of the U.S. Health and Human Services Department, is encouraging community partnerships designed to improve children's physical activity. "We need to show children the fun in being active and persuade communities to provide more activities for their youth," Thompson said. "We need to stop the guilt-ridden lectures and show kids the enjoyable things that they can do to improve their health." To read the CDC study, which appeared in this month's edition of the journal Pediatrics, go to http://www.pediatrics.org/cgi/content/full/109/5/e81.

PROVIDER NEWS Rehab Owner Charged with Double Billing Medicare, Medi-Cal SACRAMENTO, Calif.--United States attorney John Vincent has charged Scott Vogelsang, owner of Specs Rehabilitation--located in Sacramento and Yorba City--with double billing the Medi-Cal and Medicare programs. Specifically, the government charged that Vogelsang intentionally submitted incorrect claims for wheelchairs, causing Medicare to disallow the billings. Upon receiving the disallowance, Vogelsang then allegedly would bill Medi-Cal correctly for the wheelchairs. After receiving full payment from Medi-Cal, Vogelsang allegedly then would resubmit the corrected claim to Medicare for an additional 80 percent reimbursement. Vogelsang then, allegedly, would rebill Medi-Cal for the 20 percent co-pay--which Medicare wouldn't cover--even though Medi-Cal already had reimbursed 100 percent of the equipment. Vogelsang also is charged with claiming to supply new wheelchairs to beneficiaries when actually supplying less-expensive scooters. If found guilty of the charges, Vogelsang faces a maximum sentence of 10 years imprisonment and a $250,000 fine. PSA Posts Positive Results in Q2 NORCROSS, Ga.--Pediatric Services of America posted net revenue of $48 million for the second quarter ended March 31, 2002, up 5 percent from the $45.7 million posted for the same quarter a year ago. Net income was $1.14 million, or 16 cents per share, for the quarter, compared to a net income of $3.38 million, or 49 cents per share, for the same quarter a year ago. "We continue to be pleased with the company�s operating results," said Joseph Sansone, president and chief executive officer. "Cash flow was stronger than anticipated and our balance sheet reflects the core strength of our business. The company continues to address issues such as the current nursing shortage, higher product acquisition costs and other factors affecting margins in the quarter." American HomePatient Posts Small Gain in Q1 BRENTWOOD, Tenn.--American HomePatient posted a net income of $300,000, or 6 cents per share, for the first quarter ended March 31, 2002, compared to a net loss of $6.6 million, or 40 cents per share, for the same quarter a year ago. Revenues for the three months were $81.3 million, down from $91.1 million reported for the same period of 2001. During 2001, the company sold the assets of three infusion centers, two respiratory and home medical equipment centers and all of its rehab centers. American HomePatient also sold the assets of one infusion center during the first quarter of 2002. These asset sales negatively impacted revenue by approximately $9.7 million during the current quarter, the company said. MANUFACTURER NEWS ResMed Announces Q3, Nine Months Results SAN DIEGO--For the third quarter ended March 31, 2002, ResMed posted a net income of $10.4 million, or 31 cents per diluted share, compared to a loss of $10.2 million, or a loss of 30 cents per diluted share, for the same period in 2001. Revenue for the quarter increased 24 percent, from $42.7 million in 2001 to $52.8 million. Nine months net earnings were $27.7 million, or 81 cents per diluted share, compared to $3.3 million, or 10 cents per diluted share for the same period in 2001. Sales for the first nine months of the fiscal year were $147.8 million, an increase of 37 percent compared to sales during the same period in 2001. McKesson Reports Annual Results, Agrees to Acquire A.L.I. SAN FRANCISCO--For the quarter ended March 31, 2002, McKesson reported a net income of $125.4 million, or 42 cents per diluted share, compared to a loss of $175.5 million, or a loss of 62 cents per diluted share during the same period in 2001. Sales for the fourth quarter were $13 billion, compared to $11.4 billion for the same quarter in 2001. Net income for fiscal year 2002 was $418.6 million, or $1.43 per diluted share, compared to $48.3 million, or 17 cents per diluted share, in 2001. Sales during fiscal year 2002 were $50 billion, compared to 2001 sales of $42 billion. Additionally, to expand its Horizon Clinicals offerings to include data, documents, voice and medical images, McKesson has signed an agreement to acquire A.L.I. Technologies of Vancouver, British Columbia, for approximately $340 million in cash, according to a McKesson press release. McKesson expects the acquisition--which is subject to regulatory approval and other conditions--to be completed within 90 days. "The addition of medical imaging solutions to our Horizon Clinicals offering will accelerate our market momentum," said John H. Hammergren, McKesson's president and chief executive officer. CareCentric Could Lose Nasdaq Listing ATLANTA--After reporting an annual loss of $25.4 million for 2001, CareCentric received a letter from Nasdaq stating that the company's financial statements are below the minimum requirements to maintain listing on the Nasdaq SmallCap Market. Now CareCentric must decide whether to accept losing its Nasdaq listing or to submit a plan to work toward meeting Nasdaq's requirements, CareCentric said. Cardinal Health Reports Third Quarter, Year-to-Date Earnings DUBLIN, Ohio--For the third quarter ended March 31, 2002, Cardinal Health reported net earnings of $300.3 million, or 66 cents per diluted share, compared to $192.9 million, or 42 cents per diluted share, for the same quarter in 2001. Operating revenue for the quarter was $1.15 billion, compared to $1.03 billion during the same period in 2001. Year-to-date earnings were $759.9 million, or $1.66 per diluted share, compared to $604.1 million, or $1.33 per diluted share, for the same period in 2001. Operating revenue for the first nine months of fiscal year 2002 was $32.63 billion, compared to $28.41 billion for the same period in 2001.

SOURCES SAY WASHINGTON--After months of debate, Congress is preparing to throw Medicare a bone in the struggle to update an antiquated appeals system. Two months ago, the U.S. Health and Human Services Department's Office of Inspector General reported that Medicare is not nearly ready to implement appeals-system changes mandated by Congress. Indignant, members of the House Ways and Means Committee reminded the Baltimore-based Centers for Medicare and Medicaid Services that the law's Oct. 1, 2002, deadline is not negotiable. But two weeks ago, Ways and Means Committee leaders asked House Appropriators to provide CMS with resources to speed the transformation. "Seniors currently can wait years for a decision to be made on their health care coverage," a Committee press release said. "CMS needs sufficient resources to ensure that seniors get the care they need, when they need it." BOSTON--Medicare's traditional fee-for-service program performs better than the Medicare + Choice program, according to a study published last month in the Archives of Internal Medicine. In comparing the primary care that seniors in Medicare health maintenance organizations received with the care that seniors in the traditional FFS Medicare program received, researchers at Tufts University found that FFS out-performed HMOs in nine out of 11 categories. In fact, the only category in which HMOs out-performed FFS was "financial access," the researchers found. "Medicare enrollees seem to face the perennial cost-quality trade-off," the study concluded. "That is, deciding whether the advantages of primary care under traditional FFS Medicare are worth the higher out-of-pocket costs." WASHINGTON--U.S. Sen. Patrick Leahy, a democrat from Vermont and chair of the Senate's Judiciary Committee, has introduced a bill that targets fraud against seniors. If passed, the Seniors Safety Act of 2002 would boost penalties for crimes against seniors, combat health care fraud, safeguard retirement and health benefit plans and protect nursing home residents from willful neglect, according to a press release from Leahy's office. "Scam artists are taking cold, calculating aim at older Americans. They are out to violate their victims' trust and snag as much of their limited incomes as they can," Leahy said. "We need to take cold, calculating aim at criminals who are targeting seniors. This bill is a comprehensive attack on the crimes that affect seniors most."

IN OTHER NEWS A & D Medical of Malibu, Calif., has received 510(k) approval from the U.S. Food and Drug Administration for its LifeSource UA-787 blood pressure monitor, designed to provide blood pressure and pulse rate measurements even when an irregular heartbeat occurs. The Baltimore-based Centers for Medicare and Medicaid Services has awarded a contract to Lockheed Martin of Bethesda, Md., to consolidate the agency's nationwide computer network. Under the terms of the contract, Lockheed will "manage and operate CMS' mainframe and desktop computers, computer servers, voice communications infrastructure, help desk and other related services," according to a CMS press release. Altimate Medical of Morton, Minn., Has produced a video designed to teach individuals with spinal chord injuries how to use transfer techniques. The video, entitled "Life After SCI: Vol. Two, Transferring & Adapting," includes footage of transfers into vans, pickups, tractors, pontoons, standing frames and exercise machines. To request a free copy of the video, call Altimate at (800) 342-8968. The U.S. Food and Drug Administration has granted 510(k) approval for Melville, N.Y.-based Gentiva Health Services' Vacuum Assisted Closure wound therapy. Scientists at Bowman Gray School of Medicine at Wake Forest University in Winston-Salem, N.C., created the therapy, which uses localized, sub-atmospheric pressure to manage wounds, according to a Gentiva press release. This year, the National Caregiving Conference & Tradeshow will take place on Dec. 9 through Dec. 11, 2002, in Washington D.C., and will focus on caregiving's impact on workplace and marketplace oppoutunities, according to an NCCT press release. For more information, or to make a booth reservation, contact Ken Edwards, director of sales, by telephone at (804) 521-4290, or by email at [email protected]. Health Trust Purchasing Group has awarded Indianapolis-based Roche Diagnostics a multi-source contract to supply blood gas and electrolyte products to the group's member facilities and affiliates. The contract will be effective from May 1, 2002, through April 30, 2005. Johnson & Johnson of Somerville, N.J., has received 510(k) approval from the U.S. Food and Drug Administration for its Matrix Wound Dressing, which combines oxidized regenerated cellulose and collagen to treat exuding wounds, including diabetic wounds, venous wounds and pressure ulcers. OptionCare of East and Central Iowa has received the American Cancer Society's Survivor's Day Sponsorship Award for 2002. INDUSTRY BRIEFS Tim Hoffman has been promoted to vice president of manufacturer contracting for the VGM Group in Waterloo, Iowa. He will be responsible contracts for Van G. Miller & Associates and Homecare Providers Co-op. Hoffman has worked at VGM for eight years. Brett Larsen has been promoted to regional sales manager for EasyStand and Ovation products at Morton, Minn.-based Altimate Medical. Previously, Larsen was a customer service representative for Altimate. Also, Jenny Roiger and Bryanne Freitag have joined Altimate's customer service and marketing department. HealtheTech, Golden, Colo., has named Scott Meyer its vice president of worldwide sales and chief marketing officer. Meyer has more than 20 years of experience in national and global health care marketing, and, prior to joining HealtheTech, he was vice president of global business management at The Gillette Company. HealtheTech also named Mike Jaroch its executive director of human resource management. Jaroch has more than 30 years of experience in human resource management and previously held positions at Lockheed Martin and Baxter Healthcare.

STOCKS Company High Low PE Ratio 4/26/02 5/3/02 Change Abbott Laboratories 58.00 44.56 32.34 54.12 53.43 (0.69) Allied Healthcare (AHPI) 5.30 3.00 128.75 5.00 5.00 0.00 American HomePatient (AHOM.OB) 1.70 0.26 N/A 0.70 0.60 (0.10) AmerisourceBergen (ABC) 79.70 50.00 30.27 78.61 75.86 (2.75) Apria Healthcare (AHG) 29.85 19.50 18.34 25.35 26.10 0.75 Cardinal Health (CAH) 77.32 60.30 30.02 69.85 70.94 1.09 CareCentric (CURA) 3.00 0.46 N/A 0.64 0.55 (0.09) Chad Therapeutics (CTU) 4.35 1.00 N/A 2.51 3.00 0.49 Coram Healthcare (CRHEQ.OB) 0.76 0.13 N/A 0.50 0.48 (0.02) Gentiva Health Services (GTIV) 27.55 15.60 31.65 26.37 26.83 0.46 Invacare (IVC) 41.25 28.50 35.05 36.91 39.42 2.51 Johnson and Johnson (JNJ) 65.89 47.90 33.26 63.61 63.43 (0.18) Lincare Holdings (LNCR) 34.39 22.25 23.19 31.11 31.02 (0.09) Matria Healthcare (MATR) 40.00 12.66 24.36 23.25 20.55 (2.70) McKesson (MCK) 42.09 30.40 29.02 41.81 41.20 (0.61) National Home Healthcare (NHHC) 19.85 6.10 16.31 14.15 15.75 1.60 Option Care (OPTN) 17.72 8.76 26.76 18.00 14.55 (3.45) Pediatric Services of America (PSAI) 14.10 4.70 16.74 10.55 8.60 (1.95) Praxair (PX) 61.11 36.50 22.52 58.95 59.27 0.32 ResMed (RMD) 62.20 32.17 30.66 37.48 30.99 (6.49) Respironics (RESP) 37.88 23.79 26.91 32.31 32.85 0.54 Transworld Healthcare (TWH) 4.83 2.21 N/A 4.20 4.00 (0.20) Tyco (TYC) 60.09 15.25 7.80 19.90 21.65 1.75 Walgreen (WAG) 44.30 28.70 41.27 37.64 38.20 0.56

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