Columbia/HCA Healthcare Corp. has signed a letter of intent to form what could be its seventh partnership agreement with a not-for-profit hospital.
The deal with 150-bed Helen Ellis Memorial Hospital, Tarpon Springs, Fla., is expected to be completed by May 1995, pending state and federal antitrust approval, said Joseph Kiefer, Helen Ellis' administrator.
Because Helen Ellis Memorial is leased from the city of Tarpon Springs by a private not-for-profit foundation, a new lease with the proposed partnership also must be approved by 50% of Tarpon Springs' voters in an April 1995 referendum.
Columbia/HCA has cut similar deals with Winter Park (Fla.) Memorial Hospital and Rapides Regional Medical Center, Alexandria, La.
If the deal is completed, Columbia/HCA would control 29%, or nine, of the 31 hospitals in the Tampa Bay area counties of Pinellas, Hillsborough and Pasco. Columbia/HCA, however, would control five of the 10 hospitals in northern Pinellas and Pasco counties.
William Hussey, Columbia/HCA's West Florida division president, said he doesn't expect antitrust problems because three-hospital Morton Plant Mease Health Care would remain the area's dominant provider.
Under the arrangement with Helen Ellis Memorial, Columbia/HCA would acquire half the assets of the new partnership and become its managing partner.
Mr. Hussey said Columbia/HCA would contribute cash and assets for its 50% share. Assets will include a Columbia/HCA surgery center and a home health agency license, he said.
Mr. Kiefer said the amount of cash Columbia/HCA will contribute will be determined after an evaluation of the hospital is completed.
In 1993, Helen Ellis Memorial had total assets of $55.4 million and total liabilities of $40.4 million, according to HCIA, a Baltimore-based healthcare information company. The hospital had net income of $1.2 million on total revenues of $39.5 million in 1993, HCIA said.
Funds from Columbia/HCA would be deposited into the Tarpon Springs Hospital Foundation, Helen Ellis Memorial's parent organization. The foundation then would be spun off into a separate organization. Proceeds from the foundation would be used to provide an array of non-acute-care healthcare services in the community, Mr. Kiefer said.
A community-needs assessment is expected to be completed in January 1995 to define the foundation's new role, he said. By law, the not-for-profit foundation is prohibited from supporting a for-profit institution. Helen Ellis Memorial would convert into a for-profit facility.
In addition, Columbia/HCA would provide up to $20 million in capital to fund specified projects during the next five to 10 years. The hospital would continue to provide a minimum of $2.1 million in charity care during the next five years.
Helen Ellis Memorial was founded in 1927 and has been leased from the city since 1947. An increase in the hospital's $15,000 annual lease payment is expected, Mr. Kiefer said.
In other developments, Columbia/HCA agreed to buy Westlake Medical Center, Westlake Village, Calif., from Universal Health Services, King of Prussia, Pa.
Columbia/HCA officials said the buy is part of a corporate swap with Universal in which Columbia/HCA will receive Westlake and Dallas Family Hospital in exchange for giving Aiken (S.C.) Regional Medical Centers to Universal. Columbia/HCA had been forced to sell Aiken as part a settlement with the Federal Trade Commission (Dec. 5, p. 10).