A group that has adamantly opposed the entry of Columbia/HCA Healthcare Corp. into Nebraska has gone into business with another investor-owned hospital chain, Quorum Health Group.
Bergan Mercy Health System last week agreed to buy a 14% interest in Midlands Community Hospital from Quorum, a Nashville, Tenn.-based company that owns 14 hospitals and manages another 266. Midlands is the only hospital in Papillion, Neb., a growing suburb of Omaha.
Quorum bought Midlands last year for $11.4 million. The cost of Bergan Mercy's minority stake won't be disclosed, said Joan Neuhaus, vice president of Community Health Vision. Community Health Vision is a joint-venture company under which Bergan Mercy and Immanuel Healthcare System, another Omaha hospital, are merging operations. The deal is expected to be completed by the end of September.
Neuhaus contended that the decision to buy part of an investor-owned hospital was not a contradiction to her group's opposition to Columbia. "Quorum is already here, and this is a relationship that already existed," she said, noting that Bergan and Midlands have had an affiliation agreement since 1993.
However, Neuhaus said, her organization hasn't switched gears on its stance against for-profit healthcare. "We believe the community is better served by not-for-profit organizations," she said.
Community Health Vision has opposed Columbia's agreement to buy Bishop Clarkson Memorial Hospital in Omaha for $84 million, a deal that is pending over legal disputes. The not-for-profit organization appealed a certificate of need given conditionally by the state for Columbia's purchase of the hospital.
The deal is being held up because University of Nebraska Medical Center said it will exercise its first refusal rights to buy Clarkson. Columbia has filed suit to determine who has the right to buy the hospital (June 19, p. 24). The outcome of the litigation will determine whether Columbia's CON to buy Clarkson is granted.
Columbia officials reportedly also have been interested in buying University of Nebraska Medical Center.
In other developments, Quorum reported strong increases in its fourth-quarter and full-year earnings. For the fourth quarter ended June 30, the company reported a 39% increase in net income to $14.6 million, or 30 cents per share, from $10.5 million, or 24 cents per share, in the year-ago period. Revenues rose 24% to $230.6 million.
For the fiscal year, Quorum reported a 55% increase in net income to $56 million, or $1.14 per share, from $36.2 million, or 90 cents per share, in the previous year. Revenues climbed 33% to $850.2 million.
During its fiscal year, Quorum bought three hospitals. It acquired a fourth hospital, Lutheran Hospital in Fort Wayne, Ind., at the end of July.