The ripple effects of the $5.6 billion merger of Columbia/HCA Healthcare Corp. and Healthtrust, which was completed last week, spread rapidly as the company contemplated new business arrangements in Texas and Florida.
The Federal Trade Commission gave its blessing to the transaction late last month after Columbia agreed to divest seven hospitals and either sell or buyout the other co-owner's portion of a joint venture in Florida to eliminate threats to competition (April 24, p. 4).
In Texas, the future of Denton Regional Medical Center, which has been buffeted by ownership changes, seemed uncertain.
Built 21 years ago, the one-story former Healthtrust hospital in the town of Denton, a growing city of 70,000 residents about 40 miles north of Dallas/Fort Worth, is showing its age. Paint is peeling, and an outdoor sign in the parking lot reflects the hospital's management from two mergers ago.
Yet for the past couple of years Denton Regional seemed on the cusp of a renaissance. A $48 million replacement facility has been under construction on a 300-acre tract along Interstate 35, a busy thoroughfare between Dallas/Fort Worth and Oklahoma City.
Part of the replacement hospital was completed four months ago. However, the modern three-story hospital entrance and office building sits empty, surrounded by vacant parking spaces and newly planted trees.
When the 139-bed inpatient portion of the hospital will be finished is up in the air because no one knows who will own the hospital in the future.
"People are concerned about the unknown," said Derrell Bulls, board chairman of Denton Regional, about how the community and the hospital's employees feel.
The FTC ruled that a merger between the medical center and Denton Community Hospital, a Columbia facility, would have hurt competition. Now it's up to Columbia officials to decide which Denton hospital to keep.
The situation is unusual because in other antitrust decisions, hospitals were identified as part of the divestiture agreement.
As part of the FTC agreement, Columbia must sell six other hospitals in Utah, Louisiana and Florida. In every market but Denton, the hospitals to be divested already have been decided.
Columbia officials haven't said which Denton hospital they'll keep and which they'll sell.
Both hospitals are financially strong, according to the most recent data for each facility from HCIA, a Baltimore-Hospital companies
based healthcare information company. Denton Regional reported profits of $4.1 million on revenues of $48 million in 1993. Denton Community reported profits of $1.4 million on revenues of $32 million in 1994.
The replacement campus for Denton Regional dates back to its former owner, Epic Healthcare Group, which acquired the hospital when the company was spun off from American Medical International in 1988. Epic's name still graces the current and future campuses of the hospital.
In Florida, Columbia adds eight Healthtrust hospitals to increase its total to 54, or 25%, of the state's 217 hospitals. It now owns 57% of Florida's 92 investor-owned hospitals.
As part of the FTC settlement, Columbia agreed to divest two Healthtrust hospitals in the northwest panhandle region of Florida. The hospitals are Santa Rosa Medical Center in Milton and North Okaloosa Medical Center, Crestview.
From Pensacola to Tallahassee, Columbia now owns six, or 26%, of the 12-county area's 23 medical-surgical hospitals. It would have owned 35% of the panhandle's hospitals.
In the 34-hospital Tampa-St. Petersburg-Clearwater market, Columbia owns 38% of the hospitals, increasing its number to 12 from nine.
Columbia's hospitals in the Miami-Fort Lauderdale-Palm Beach market increase to 17 from 14. In Dade, Broward and Palm Beach counties, Columbia owns 31% of the area's 54 hospitals.
In Fort Myers, Columbia picks up Healthtrust's East Pointe Hospital, an 88-bed facility in eastern Lee County. It now controls three of the five hospitals in Lee County and 33% of the county's total inpatient admissions.
In a 40-mile stretch from Englewood in southern Sarasota County to Fort Myers, Columbia owns five of the area's nine hospitals. Potential competitors would be Lee Memorial in Fort Myers and St. Joseph Hospital in Port Charlotte. Naples-based Health Management Associates owns Cape Coral (Fla.) Hospital and Medical Center Hospital in Punta Gorda.
Meanwhile, a provision in the FTC agreement likely will hasten the resolution of a dispute about the fate of South Seminole Hospital in Longwood, said one attorney involved in the case.
The provision requires Columbia to sell its 50% interest in the hospital to its current co-owner, Orlando Regional Healthcare System, or buy out Orlando Regional's interest in the hospital.
Either transaction would require prior FTC approval, but the advantage goes to Orlando Regional because Columbia already owns another hospital in the three-hospital market.