Methodist Hospital's purchase of a neighboring hospital in the Texas Medical Center in Houston was the most expensive per-bed purchase of a hospital during the third quarter ended Sept. 30, 1993, according to a new healthcare transaction data base.
The summary of healthcare merger and acquisition activity was compiled by Irving Levin Associates, a New Canaan, Mergers
Conn.-based financial services firm.
Irving Levin compiled information on nine transactions involving 18 hospitals announced during the quarter. Prices ranged from $166,000 to more than $286,000 per bed. Prices weren't disclosed in several other transactions, and they couldn't be included in the summary.
"The high level of merger and acquisition activity will continue during 1994 as the industry consolidates," predicted Stephen Monroe, a partner at Irving Levin. The firm said it plans to continue compiling the information on a quarterly basis.
Methodist paid $85.1 million, or $286,532 per bed, for Diagnostic Center Hospital. It was a particularly high-dollar deal because the acquired facility is next to Methodist in the prestigious Texas Medical Center, where property is at a premium. Diagnostic was one of the few remaining available parcels adjacent to Methodist.
Another important factor was that Diagnostic has longstanding ties with a large primary-care physician group, the 62-member Diagnostic Clinic of Houston.
Methodist bought the hospital from HealthTrust-The Hospital Co., a Nashville, Tenn.-based hospital chain, last September. The deal also included two medical office buildings.
Other large deals during the quarter included the sale of 10 Charter Medical Corp. hospitals to Quorum Health Group, Nashville, Tenn., for $340 million, or $239,268 per bed.
The study also lists 10 psychiatric hospital transactions involving 15 hospitals and 57 group homes announced during the quarter. Prices in most of those transactions weren't released.
Among HMOs, the highest per-enrollee deal was the acquisition of Family Health System, Miami, by Physician Corp. of America for $750 per enrollee. Miami-based PCA paid $45 million for the 60,000-enrollee HMO.