The nation's largest freestanding women's hospital will remain independent after the board of the foundation that oversees the hospital voted down a proposed joint venture with Columbia/HCA Healthcare Corp.
The action, taken Jan. 29, is a sign, albeit faint, of growing local opposition to takeovers of not-for-profit hospitals by the nation's largest hospital chain.
The move to maintain the status quo at 234-bed Woman's Hospital in Baton Rouge, La., comes exactly two weeks after the board of directors at Johnson City (Tenn.) Medical Center rejected a proposed joint venture with Columbia (Jan. 22, p. 6). The Nashville, Tenn.-based chain and Johnson City had been negotiating a deal for about a year.
And, on Jan. 25, Tennessee Gov. Don Sundquist got involved in the ownership dispute that's brewing at Cookeville (Tenn.) General Hospital, when he signed a bill authorizing a local referendum on whether the 157-bed, city-owned facility should be sold. Last month, the Cookeville City Council voted 3-2 to solicit bids for the hospital, sparking a protest rally from local residents and others (Jan. 8, p. 28). Columbia has expressed an interest in acquiring the hospital. The binding referendum is scheduled for March 12.
In Baton Rouge, Columbia and Woman's Hospital inked a tentative partnership agreement last September (Oct. 2, 1995, p. 4). At that time, the proposed deal called for shared governance of the hospital, but details of the ownership arrangement weren't disclosed. According to local press reports, Columbia would have paid at least $50 million for an 80% stake in the proposed joint venture.
In 1995, the hospital earned $7.9 million on net revenues of about $83.5 million, said Vicki Romero, the hospital's president and chief executive officer.
Although the management of the hospital supported the deal, the board of the hospital's parent corporation, the Women's Health Foundation, rejected it. The 93 members of the board voted 50-40 against the sale, with three not voting. A two-thirds majority, or 62 votes, was needed to approve the sale.
Many of the foundation's members are area obstetricians and gynecologists who helped found the hospital in 1957. And the way the hospital's management and Columbia executives handled the deal alienated many of the foundation's old guard, some say.
"Columbia didn't go to the older doctors to begin with," said Ed Bowman, M.D., a 65-year-old gynecologist on the foundation board. "By the time we heard about it, it was a done deal."
The final nail in the deal's coffin was a conversion provision in the agreement, which wasn't completed until shortly before the vote, he said. The provision would have allowed Columbia to convert the hospital into a general acute-care facility after five years, said Bowman, who voted against a sale.
The conversion option "was insurance for Columbia if the women's hospital started to not do well financially," Bowman said. "It turned a lot of people off because it strayed from the original mission of the hospital."
But Romero emphatically disputed Bowman's characterization of events.
First, Columbia voluntarily removed the conversion provision from the proposed agreement before it was voted on because it was sensitive to the physicians' feelings, Romero said.
Second, the hospital didn't deal exclusively with Columbia and, in fact, entertained partnership offers from at least three other suitors, she said.
And third, the foundation's members were "fully informed every step of the way" during the negotiations with Columbia, she said.
Still, Bowman said the foundation intends to call on the hospital board of directors, which sits below the foundation board, to investigate the amount of money the hospital spent courting foundation members to side with Columbia. According to Bowman, those activities included retreats, special meetings and flying foundation members to other Columbia facilities for a first-hand look at how they operate.
"Columbia subverted the administration of the hospital," Bowman charged.
The hospital's board meeting is scheduled for Feb. 15.
At deadline, the head of Columbia's Louisiana division, Mel Lagarde, didn't respond to an interview request.
But in a press release, Lagarde said, "Woman's Hospital was a key to Columbia's strategy of building a comprehensive statewide network. We hoped this partnership would have further demonstrated our commitment to the Baton Rouge area and Louisiana."
Columbia owns 23 hospitals in Louisiana, including one in Baton Rouge, 175-bed Medical Center of Baton Rouge.