One hospital deal is on, one has been resurrected and another is off to a rocky start in western Tennesee, where the war between the not-for-profit and for-profit ownership sectors is boiling over.
In Cookville, a city of 25,000 about 145 miles east of Nashville, residents and other interested people rallied on Dec. 15, 1995, to protest the possible sale of the town's city-owned hospital to another party, including Columbia/HCA Healthcare Corp., whose executives met with city officials shortly before voting to put the 157-bed hospital up for bid.
In Johnson City, the on-again/off-again negotiations between Columbia and 407-bed Johnson City Medical Center resumed late last month after talks broke down in November. Columbia owns the city's other acute-care facility, 127-bed North Side Hospital.
And in nearby Bristol and Kingsport, 336-bed Bristol Regional Medical Center and 383-bed Holston Valley Hospital entered into a tentative merger agreement on Dec. 18, 1995. The deal came less than four months after Columbia and Johnson City Medical Center announced in late August that their discussions were back on.
Meanwhile, the Cookville situation has attracted the interest of groups that oppose the sale of not-for-profit hospitals to for-profit chains.
"The loss of this hospital will have a negative and destabilizing effect on all not-for-profits in the region," said Elliott Moore, president of the Hospital Alliance of Tennessee, in a Dec. 13 letter to members of the alliance, which represents not-for-profit Tennessee hospitals.
The alliance helped organize the "Hug Your Hospital" rally to protest the possible sale of Cookville General Hospital. More than 1,000 people showed up, according to several observers, and the participants actually joined hands around the entire grounds of the hospital rather than just the hospital building itself.
On Dec. 6, the board of the hospital voted to oppose a sale of the hospital as did the hospital's medical staff. A survey of local residents found that 54% opposed a sale. However, on Dec. 7, Cookville's five-member City Council voted 3-2 to solicit bids for the facility.
A year earlier, the City Council voted against a possible sale.
According to local press reports, three Columbia executive met with the City Council about a week before its vote on the matter to express their interest in acquiring the hospital.
After the council voted to solicit bids, the city announced that Columbia was on the list of potential buyers. The others included Health Management Associates, Naples, Fla.; Community Health Systems, Brentwood, Tenn.; and Baptist Hospital, Nashville.
"This will be an important battle to watch because there will be an open public debate," Moore said. "Cookville is city-owned, and Columbia won't be able to work out a deal behind closed doors and then make an announcement."
City officials and executives in Columbia's Tennessee division didn't return repeated phone calls.
Cookville is a profitable hospital strategically located about midway between Nashville and Knoxville along Interstate 40, which connects Middle Tennessee with the western half of the state. In 1994, the hospital turned a $2.1 million profit on about $37 million in total net revenues, according to figures from the state health department.
Columbia executives also didn't return phone calls about the chain's talks with Johnson City Medical Center.
The two sides have been talking about a deal since early 1995. In June, the hospital suspended negotiations with the chain. In August, talks resumed but died again on Nov. 7 because of "governance issues," the hospital said. However, after Columbia sent letters to individual hospital board members, another meeting ensued on Dec. 15 and negotiations were back on.
On Dec. 16, Johnson City Medical Center confirmed that at least one more meeting would take place between the two parties after Jan. 1. And the hospital requested that the media not contact it, the hospital board, board chairman or regional or national Columbia executives until further notice.
Finally, one deal did move forward. That's the proposed merger of Bristol Regional and Holston Valley, two private not-for-profit hospitals that compete with Columbia facilities in the far northeast corner of the state.
On Dec. 18, the hospitals signed an "agreement in principle" to pursue a full-asset merger. The hospitals would be governed by a single 16-member board with equal representation from both sides, a spokesman for the hospitals said. They anticipate consummating their deal by July 1, following the necessary legal clearances, including federal antitrust approval.
J. Lewis Saylor, Bristol's vice president for marketing, said the hospitals intend to file their required pre-merger notification documents with the government by mid-January.
The deal would give the hospitals control of nearly half the licensed acute-care beds in the market.
"We don't anticipate at this point in time anything that would short-circuit the merger," he said.
