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Tenet agrees to lobby Texas to open doctor review records

SANTA BARBARA, Calif.-As part of a unique settlement of a lawsuit against a Texas hospital it owns, Tenet Healthcare Co. has agreed to advocate that the Texas' Legislature consider changes to laws that keep secret the deliberations of doctor peer-review panels.

Tenet, a Santa Barbara, Calif.-based hospital operator, also will pay the plaintiffs $9.5 million to settle the suit, which accused the hospital's former owner of contributing to the death of a 20-year-old female patient by hiring a doctor with known drug problems.

Relatives of the woman sued the doctor and OrNda HealthCorp, which owned the hospital when the woman died. Tenet was not named as a defendant, but in January it bought the hospital, Park Hospital & Medical Center in Lubbock, Texas.

Tenet also agreed to advocate that the Texas Legislature pass laws that would negate a recent court ruling forcing plaintiffs to prove a hospital acted with malice in giving a doctor the privilege to work in the hospital.

Tenet will encourage doctors who work at the Lubbock hospital to be tested for drugs. The doctors are not Tenet employees, and a decision to be tested ultimately is up to them, a Tenet spokesman said.

Tenet is insured by American International Group Inc. for the loss.

The settlement, which a Texas state court judge approved last week, stems from the July 1995 death of a woman who died after an anesthesiologist punctured a major blood vessel while administering an injection in preparation for childbirth.

The hospital hired and granted privileges to the anesthesiologist even though references and other hospital medical personnel knew he had potential drug-related problems, the settlement stated.

Willis Corroon buys into broker

LONDON-Willis Corroon Group P.L.C. has agreed to acquire a one-third stake in the largest independent French insurance broker, Paris-based Gras Savoye S.A.

A brief statement Friday said more details would be announced "in due course," while neither company would say in the meantime how much Willis is paying for the stake and from whom it is buying it.

However, Gras Savoye said the agreement provides that the existing managing partners will retain the present structure and that French majority ownership will continue for up to 12 years.

John Reeve, Willis Corroon's executive chairman, said a key reason for the investment in Gras Savoye is "to attain leadership positions in chosen market sectors." He added it would enhance the capabilities of both brokers to service multinational clients.

Willis and Gras Savoye have historic links resulting from their membership in the UNISON brokering network, which Willis left in 1990. Mr. Reeve would not say if Willis would rejoin UNISON or if Gras Savoye would leave it.

Gras Savoye, which entered its 90th year in 1997, is owned 70% by the Gras and Lucas families and 10% each by French insurance companies AXA-UAP, Assurances Generales de France and Athena Assurances.

Julianne Jessup, an insurance brokering analyst in London with UBS Ltd., sees the link as a good and "logical" move for both brokering groups. They have had a longstanding relationship through their UNISON participation and, she adds, it's "good to see Willis building up an international network" by taking a stake in a major independent broker rather than relying solely on its associations with other companies.

However, analyst Nick Bunker of HSBC James Capel said that based on the sketchy information available, he was decidedly "underwhelmed" by they announcement. "If they (Willis) were going to buy Gras Savoye, they should have bought the whole thing," because with a minority stake they haven't gained control and they won't get any dividends, he said.

He added that there is a long history of outsiders buying a minority stake in French brokers, "and it has never worked."

Fen-phen class action sought

SAN FRANCISCO-Attorneys are seeking class-action certification of a lawsuit filed last week against several pharmaceutical companies that manufacture and sell the drugs used in the popular diet drug combination known as fen-phen.

The suit was filed last week in U.S. District Court in San Francisco, one day after researchers at the Rochester, Minn.-based Mayo Clinic raised concerns about the use of fenfluramine and phentermine. The combination was prescribed to 18 million Americans last year.

Mayo Clinic researchers identified 24 women who had developed damaged heart valves after taking the drugs, prompting the Food and Drug Administration to caution doctors. However, the researchers pointed out that a definitive relationship between fen-phen and the medical problem cannot be determined.

Among other things, the lawsuit alleges manufacturers misrepresented the frequency and severity of adverse health effects. It also alleges negligence and product liability. It was filed by the Law Offices of Arnold Laub and the firm of Lieff, Cabraser, Heimann & Bernstein on behalf of people nationwide who have taken the drugs. Both are San Francisco firms.

The suit seeks unspecified amounts for medical monitoring of people who may suffer adverse effects in the future as well as general and punitive damages. The suit also names the manufacturers of a related drug, dexfenfluramine, known as Redux. Redux sometimes is part of the drug combination.

Not all of the pharmaceutical companies could be reached for comment. Officials for SmithKline Beecham declined to comment on the lawsuit. In a press release related to the Mayo Clinic findings, the company said the combined use of phentermine with fenfluramine is not approved by the FDA and it is not recommended by SmithKline, which manufactures a brand of phentermine that accounts for about 5%of the phentermine prescriptions written in the United States.

Other defendants in the suit are: Gate Pharmaceuticals, Seatrace Pharmaceuticals Inc., Abana Pharmaceuticals Inc., Richwood Pharmaceuticals Co. Inc., A.H. Robins Co. Inc., and Wyeth-Ayerst Laboratories Co.

OSHA reforms raise concerns

WASHINGTON-The Clinton administration has major concerns about attempts to reform the Occupational Safety and Health Administration, the acting head of OSHA says.

Although the White House has not taken a formal position on legislation introduced by Sen. Michael Enzi, R-Wyo., the administration does have several concerns about the bill, said Gregory Watchman, OSHA's acting head.

Among the administration's concerns are provisions in S. 765 that would: exempt some employers from random OSHA inspections if they hired a third-party auditor to conduct workplace inspections; permit fines of employees as well as employers for safety violations; and call for alcohol- and drug-testing of workers. Mr. Watchman said many employers he has spoken with do not favor the third-party audit proposal in part because it raises the question of employer liability if a fatal accident occurred after a workplace had been approved by an auditor. The drug-testing and employee fine provisions would not expand and protect workers' rights, which is a key function of OSHA, he said.

However, Mr. Watchman praised Sen. Enzi's legislation in testimony last week before the Senate Labor and Human Resources Subcommittee on Public Health and Safety, saying the freshman senator had "made a good-faith effort" in seeking out the concerns of business, labor and government while drafting his bill.

The Clinton administration also has expressed opposition to portions of other OSHA reform measures introduced last year by Sens. Judd Gregg, R-N.H., and Kay Hutchinson, R-Texas, Mr. Watchman noted. Although he did not say outright that the administration categorically opposed new versions of the two bills introduced earlier this year, Mr. Watchman noted that the measures are very similar to the 1996 bills.

Burger King settles suit

WASHINGTON-Burger King Corp. will review all its company- owned restaurants to ensure they are accessible to disabled people as part of a settlement with a Bowie, Md., woman who claimed the fast-food chain discriminated against her.

The lawsuit, filed by Patricia Day in 1994 under the Americans with Disabilities Act, asserted that two Burger King franchises in the Washington, D.C., area did not comply with the 1990 law mandating that all public areas must accommodate the disabled. Ms. Day pressed charges after her wheelchair got stuck in the metal barriers of the restaurant's service line.

The Washington-based Disability Rights Council, which handled Ms. Day's case, said at news conference in Washington that under the terms of the settlement, Burger King will hire a consultant to survey the 502 restaurants that the company owns to identify and fix any areas that would impede a disabled person. Included is a monetary award of an undisclosed amount.

"We recognize the importance of assuring that all our customers enjoy the experience of eating at our restaurants, and we'll continue to take the necessary steps to achieve that goal," a company spokeswoman said.

There are no estimates of the total cost of the settlement for Burger King, said the spokeswoman, who added it is not yet known if those costs will fall under the corporation's insurance coverage.

Starbucks reviews its security

WASHINGTON-Starbucks Corp. has beefed up security in seven stores in and around the District of Columbia in the wake of the gunshot slayings of three employees in a Starbucks store in Washington, D.C.'s Georgetown area.

The Seattle-based coffee chain stationed security guards in six Washington, D.C., stores and one in Alexandria, Va., last Monday.

Starbucks now is reviewing its security policies and procedures, said a spokesman, who declined to say whether security guards have been stationed at any other of its more than 1,200 stores nationwide. Starbucks also is considering other security changes, the spokesman said.

Each Starbucks outlet has dead-bolt locks on its door and an alarm system, while some stores also have surveillance cameras, he added.

After arriving at work at 5: 15 a.m. last Monday, a Starbucks employee discovered the bodies of three workers in a back room of a store in the Georgetown neighborhood, police said.

Starbucks has 62 stores in the Washington area, which includes the District of Columbia and surrounding Maryland and Virginia suburbs.

Briefly noted

Willis Corroon Group P.L.C. last week moved to put a defunct insurance subsidiary, Sovereign Marine & General Insurance Co. Ltd., into provisional liquidation following an arbitration decision in favor of a French reinsurer. The undisclosed decision meant that Sovereign, in runoff since 1991, had to ask for "an unlimited future financing commitment" that Willis Corroon could not meet, said a spokesman for the broker. Willis appointed KPMG partner Tony McMann provisional liquidator for Sovereign. . . .Sally B. McCarty has been named insurance commissioner in Indiana after serving as acting commissioner since February. Ms. McCarty, who assumed the position late last month, had been chief deputy commissioner since August 1996. . . .Gov. Tom Ridge of Pennsylvania appointed Gregory Martino on June 28 the acting insurance commissioner. He replaces Linda Kaiser, who left Pennsylvania's Insurance Department to become senior vp, general counsel and corporate secretary of Reliance Insurance Co. in Philadelphia (BI, June 9). . . .A bill giving unmarried persons some of the same benefits and rights as those in traditional marriages became law last week in Hawaii. The legislation passed last spring will allow adults of at least 18 years of age to extend their group health insurance, family leave provisions and other benefits to another person registered with the state as a reciprocal beneficiary (BI, May 5). . . .The Pension Benefit Guaranty Corp. is taking over and terminating two underfunded pension plans sponsored by Silo Inc., an appliance retailer, which ceased operations last year. The two plans have about 3,000 participants and $3.4 million in unfunded liabilities.