National Hospital for Orthopaedics and Rehabilitation in Arlington, Va., has signed an agreement calling for Columbia/HCA Healthcare Corp. to manage the 129-bed hospital. Terms were not disclosed.
The not-for-profit hospital would be Columbia's third in the Washington metropolitan area.
Under the agreement, Columbia will not own an equity position in the hospital. Columbia has a similar management arrangement with Bethany (Okla.) Health Center.
National, which will remain not-for-profit, is a member of VHA, an Irving, Texas-based alliance of not-for-profit hospitals. "Since our not-for-profit status is not changing, I don't know what impact that will have" on the hospital's VHA membership, said Edward Jenkins, the hospital's president and chief executive officer.
Jenkins said the hospital lost money in the past two years after half the physicians in a 12-member orthopedic group left to practice at another hospital system with more managed-care contracts. Trustees of 40-year-old National realized that the hospital had to be part of a network as well, Jenkins said.
In an unrelated announcement, Standard & Poor's Corp. last week affirmed its ratings on $4 billion in Columbia debt and raised Healthtrust's $1 billion in bonds to the same investment-grade rating of Columbia's debt. Columbia completed its merger with Healthtrust last week.
The New York-based rating agency affirmed its BBB+ rating on Columbia's senior debt, A-2 rating on its commercial paper, and BBB on subordinated debt. In addition, Standard & Poor's raised its rating on Healthtrust's subordinated debt to BBB from B. B is a speculative-grade rating from Standard & Poor's.