Hospital Corporation of America

HCA Holdings

Type	Public
Traded as	NYSE: HCA
Industry	Health care
Founded	1968
Headquarters	Nashville, Tennessee, United States
Number of locations	273
Area served	United States and London
Key people	Richard M. Bracken (CEO)
Revenue	US$33.000 billion (2010)
Profit	US$673,000,000 (2008)
Employees	180,000
Website	hcahealthcare.com

Hospital Corporation of America (HCA) is the largest private operator of health care facilities in the world,^[1] It is based in Nashville, Tennessee, United States and is widely considered to be the single largest factor in making that city a hotspot for healthcare enterprise.

History

The founders of HCA include Jack C. Massey and Dr. Thomas Frist, Sr, grandfather of former U.S. Senate majority leader Bill Frist. Richard M. Bracken is the current CEO of HCA.

During the 1970s-1980s the corporation went through a tremendous growth period acquiring hundreds of hospitals across the United States which numbered 255 owned and 208 which HCA managed.

In 1989, the hospital operator was acquired for $5.3 billion in a management buyout led by Chairman Thomas J. Frist^[2] and completed a successful initial public offering in the 1990s. In 1993 HCA merged with Louisville-based Columbia Hospital Corporation to form Columbia/HCA. In April 1998 Birmingham, Alabama-based HealthSouth Corporation announced it was acquiring the majority of HCA's surgical division.

On March 19th, 1997, investigators from the FBI, the Internal Revenue Service and the Department of Health and Human Services served search warrants at Columbia/HCA facilities in El Paso and on dozens of doctors with suspected ties to the company.^[3] Following the raids, the Columbia/HCA board of directors forced Rick Scott to resign as Chairman and CEO. ^[4] He was paid a settlement of $9.88 million, and left with 10 million shares of stock worth over $350 million, mostly from his initial investment.^[5][6] In 1999, Columbia/HCA changed its name back to HCA, Inc.

In settlements reached in 2000 and 2002, Columbia/HCA pleaded guilty to 14 felonies. They admitted systematically overcharging the government by claiming marketing costs as reimbursable, by striking illegal deals with home care agencies, and by filing false data about use of hospital space.

HCA also admitted fraudulently billing Medicare and other health programs by inflating the seriousness of diagnoses and to giving doctors partnerships in company hospitals as a kickback for the doctors referring patients to HCA. They filed false cost reports, fraudulently billing Medicare for home health care workers, and paid kickbacks in the sale of home health agencies and to doctors to refer patients. In addition, they gave doctors "loans" never intending to be repaid, free rent, free office furniture, and free drugs from hospital pharmacies.^{[7] [8]}

In late 2002, HCA agreed to pay the U.S. government $631 million, plus interest, and pay $17.5 million to state Medicaid agencies, in addition to $250 million paid up to that point to resolve outstanding Medicare expense claims.^[9] In all, civil law suits cost HCA more than $2 billion to settle, by far the largest fraud settlement in US history.^[10]

The name subsequently reverted to "Hospital Corporation of America." HCA abandoned the use of its name in its home market and instead promotes its Nashville hospitals under the TriStar brand.

On July 1, 2005, Senator Frist sold all of his HCA shares two weeks before disappointing earnings sent the stock on a 9-point plunge. Frist claimed that he sold his shares to avoid the appearance of a conflict of interest if he ran for president. Other executives sold their stock at the same time. Shareholders sued HCA in a lawsuit alleging that the company made false claims about their profits to drive up the price which then fell when the company reported disappointing financial results. The lawsuit was settled in August 2007 with HCA agreeing to pay $20 million to the shareholders.^[11]

In 2006, Kohlberg Kravis Roberts and Bain Capital, together with Merrill Lynch and the Frist family (which had founded the company) completed a $31.6 billion acquisition of the hospital company, making the company privately-held again 17 years after it was taken private for the first time in a management buyout. At the time of its announcement, the HCA buyout would be the first of several to set new records for the largest buyout, eclipsing the 1989 buyout of RJR Nabisco. It would later be surpassed by the buyouts of Equity Office Properties and TXU.^[12]

On Friday May 7, 2010, HCA announced the corporation will once again go public with an expected 4.6 billion dollar IPO.

Also in May 2010, one of the company's facilities, Centerpoint Medical Center, found itself at the center of controversy when a labor and delivery nurse, Dixie Van Hercke, concerned about the welfare of an infant born to blind parents, contacted the Missouri Department of Social Services. The infant was subsequently placed in foster care for 57 days until advocacy efforts spearheaded by the National Federation of the Blind resulted in the infant's return to her parents. A lawsuit has been threatened with the baby's parents and disability rights organizations alleging that Centerpoint, HCA of the Midwest and Hospital Corporation of America fail to properly train employees in the area of disability awareness. The actions of Ms. Van Hercke, Centerpoint and the Missouri Department of Social Services were also soundly condemned by parents' groups and organizations that support the rights of breast feeding mothers.^[13][14][15]

On March 10, 2011, HCA listed on the NYSE after raising $3.8 billion in the largest ever private equity-backed IPO on a US exchange to date.^[16]

Facilities

As of 2006^[update], HCA operated 173 hospitals and 107 freestanding surgery centers located in 20 U.S. states and London.^[17][18][19] The London sites include The Harley Street Clinic, The Lister Hospital, London Bridge Hospital, The Portland Hospital, The Princess Grace Hospital and The Wellington Hospital. In August 2007, HCA sold its hospitals in Switzerland due to decreasing revenue.^[20]

The Princess Grace Hospital has become nationally and internationally renowned for excellence in the field of breast cancer and surgery, aided by its experts in the field, Professor Kefah Mokbel and Dr. Nick Perry who, in 2005, founded The London Breast Institute.

See also

• HCA Midwest Division
• Richard L. Scott (aka Rick Scott) (former Chairman and CEO)
• Jack Bovender (former Chairman and CEO from 2002 to 2009)

References

1. ^ "July 2006 - US hospital firm bought for $33bn". BBC News. July 24, 2006. http://news.bbc.co.uk/1/hi/business/5211216.stm. Retrieved September 9, 2010. 
2. ^ Freudenheim, Milt. Buyout Set For Chain Of Hospitals. The New York Times, November 22, 1988.
3. ^ "U.S. Expands Search of Columbia/HCA in Texas". The New York Times. http://partners.nytimes.com/library/financial/032197columbia-hca-investigate.html. 
4. ^ 2 LEADERS ARE OUT AT HEALTH GIANT AS INQUIRY GOES ON. New York Times July 1997
5. ^ http://www.salon.com/news/feature/2009/09/30/rick_scott_one
6. ^ http://www.thefreelibrary.com/HOSPITAL+FIRM+OUSTS+ITS+FOUNDER%3B+COLUMBIA%2FHCA+TRIES+TO+STOP...-a083874577
7. ^ Forbes. December 15, 2000. http://www.forbes.com/2000/12/15/1215disaster.html. 
8. ^ http://www.heraldtribune.com/article/20101020/OPINION/10201022?p=2&tc=pg
9. ^ Appleby, Julie (December 18, 2002). "HCA to settle more allegations for $631M". USA Today. http://www.usatoday.com/money/industries/health/2002-12-18-hca-settlement-_x.htm. 
10. ^ http://www.justice.gov/opa/documents/doj-accomplishments.pdf
11. ^ [1]^{[dead link]}
12. ^ SORKIN, ANDREW ROSS. "HCA Buyout Highlights Era of Going Private." New York Times, July 25, 2006.
13. ^ http://www.nfb.org/images/nfb/Publications/bm/bm10/bm1010/bm101002.htm
14. ^ http://www.kmbc.com/news/24332800/detail.html
15. ^ http://www.nursingfreedom.org/2010/07/letter-to-missouri-department-of-social.html
16. ^ http://www.renaissancecapital.com/ipohome/news/HCA-Holdings-prices-IPO-at-$30.00-high-end-of-the-range-9141.html
17. ^ "News". Phx.corporate-ir.net. http://phx.corporate-ir.net/phoenix.zhtml?c=63489&p=irol-newsArticle&ID=959368&highlight=. Retrieved September 9, 2010. 
18. ^ "HCA news releases". Phx.corporate-ir.net. http://phx.corporate-ir.net/phoenix.zhtml?c=63489&p=irol-news&nyo=0. Retrieved September 9, 2010. 
19. ^ "HCA private hospital group, London, UK". Hcahospitals.co.uk. http://www.hcahospitals.co.uk/. Retrieved September 9, 2010. 
20. ^ "HCA Facility Map" (PDF). http://www.hcahealthcare.com/CPM/HCA%202005%20Location%20Map.pdf. Retrieved September 9, 2010. 

• HCA history

External links

• Corporate page
• TriStar home page
• HCA Midwest Division home page
• HCA East Florida Division
• HCA West Florida Division
• CEO's official bio
• HCA HealthONE Colorado
• PBS report on fraud case
• COLUMBIA/HCA
• London Bridge Hospital