A trial court jury in Texas has awarded an El Paso physician $6.5 million in damages after agreeing that Columbia/HCA Healthcare Corp.'s hardball business tactics economically injured his practice.
The same types of aggressive business tactics may be at the root of a federal investigation that led to an FBI raid on the company's El Paso facilities this month (March 24, p. 3).
About six weeks before the raid, on Feb. 6, a 10-member jury in Harris County (Texas) District Court agreed with a local physician, A. Lee Schlichtemeier, M.D., that Columbia improperly lured his business partner, another physician, to scrap their plans to develop a competing cancer center there and instead invest in the company's El Paso operations.
Columbia owns four hospitals in El Paso, including two acute-care facilities. It also owns a number of ancillary healthcare services there and several medical office buildings.
"It was a good match, and the partnership between Dr. (Ambrose) Aboud and (Schlichtemeier) started out with the best intentions," said Thomas Albright, an Austin, Texas, attorney who represented Schlichtemeier. "Enter Columbia, and the partnership ended and, as you can see, a jury ruled Columbia acted unlawfully."
Schlichtemeier, a radiation oncologist, and Aboud, who operates a large oncology practice in El Paso, began discussing their partnership in 1989, shortly after Columbia formed a partnership with 120 El Paso physicians and purchased the company's first two hospitals there in 1988.
In late 1990 and early 1991, Columbia began talking to Aboud about developing a cancer center. The center was eventually developed by Columbia and operates as Columbia Regional Oncology Center.
Schlichtemeier sued Columbia and Aboud in 1995, alleging they conspired to defraud him and breach Aboud's fiduciary duty to the proposed partnership.
Columbia Chairman and Chief Executive Officer Richard Scott, who was deposed but didn't testify at the January trial, said he couldn't recall whether he met with Aboud about the cancer center. However, Aboud said in his deposition that he met with Scott many times about investing in the cancer center.
The jury awarded Schlichtemeier $1.4 million in compensatory damages. It also awarded $5 million in punitive damages against Columbia and another $50,000 against Aboud.
At deadline, Columbia executives and attorneys weren't available for comment on any appeal.
El Paso has been Columbia's primary laboratory for physician ownership, strengthening the possibility that federal investigators are interested in the company's arrangements with physicians (See related story, p. 11).
Authorities wouldn't disclose the nature of the investigation that resulted in the raid. Warrants remained sealed late last week.