Columbia/HCA Healthcare Corp. last week announced that it had decided to maintain its corporate headquarters in Louisville, Ky., rather than moving to Nashville, Tenn., the former home of HCA-Hospital Corporation of America.
Columbia merged with HCA in February to form the nation's largest for-profit hospital chain. It owns 192 hospitals in 26 states.
After the merger, there was much speculation over where the new company would settle and much competition between the two cities over being the headquarters city for the healthcare giant (Feb. 14, p. 94).
Columbia has 935 employees in its corporate office in Louisville. HCA has 750 corporate employees in Nashville.
A spokesman for the companies said a decision on how many positions will be shifted to Louisville hasn't been made, and the shift won't be completed for many months.
Of HCA's 750 employees in Nashville, 350 will remain in the city to operate the firm's data center, he said.
A "critical component" in making the decision to stay in Louisville was the ability of the company and the state of Kentucky to renegotiate a contract that allows Columbia to continue to manage 404-bed University of Louisville Hospital, the company said.
In 1983, Humana-later Galen Health Care-signed a 40-year lease with the state to operate the hospital. Columbia assumed the lease when it merged with Galen last year.
The lease was controversial because it required Humana to provide all of the indigent care in Jefferson County but allowed the firm to recoup as much as 95% of its charges from the state, county and city without disclosing the actual cost of the care (June 15, 1992, p. 28).
Under the new lease agreement, Columbia can recoup only 58% of its billed charges for charity care at the hospital.
The state also gave Columbia three tax incentives that, according to Kentucky Secretary of Finance Pat Mulloy, aren't any greater than the state gives other businesses.
First, during the next 10 years, Columbia annually can deduct 50% of any new capital investment from its corporate state income tax. Second, Columbia can retain as another tax credit two-thirds of the state income tax withholding amounts for each Columbia employee. And third, the state will donate $10,000 per new employee from out of state toward the construction of a new Columbia headquarters building. The donation can't exceed $3 million.