Although the growing number of state laws dealing with not-for-profit hospital sales may set up hurdles for Columbia/HCA Healthcare Corp.'s hospital acquisition plans, the laws aren't stopping the Nashville chain from trying.
Last week, a two-hospital system south of Boston agreed to terms of a sale to Columbia. Columbia will pay $58 million for Neponset Valley Health System, which includes Norwood (Mass.) Hospital and Southwood Community Hospital in Norfolk, Mass.
Terms also include promises to maintain paramedic and emergency services and the same level of free care for at least the next three years. Columbia also pledged at least $15 million in capital improvements.
Net proceeds of the sale will go toward establishing a community foundation, although most of the purchase price will be needed to pay off the system's $55 million in debt. But in addition, a 56-acre tract of land owned by Neponset and any funds previously donated to the system will be under foundation control.
Columbia last week also signed a letter of intent to lease Fallbrook Hospital, a 149-bed public facility in northern San Diego County.
Columbia would lease the facility for 30 years. In return, it would pay the hospital district that owns Fallbrook $4.4 million, which the district would use to help retire the hospital's $6.6 million debt. Columbia also would offer the district a line of credit of up to $2 million to pay off the balance of the hospital's debt.
Meanwhile, Columbia and Riverside (Calif.) Community Hospital last week completed their joint-venture deal. Columbia now owns 75% of the corporation that operates the 369-bed hospital, for which it paid $54.4 million (April 28, p. 6).
Finally, Columbia-HealthOne Chief Executive Officer Jeff Dorsey announced his resignation last week to run an aquarium planned for Denver.
Dorsey has been a longtime supporter and held a seat on the board of directors of Colorado's Ocean Journey, a $93 million aquarium under construction. He will become its CEO and president.
A date has not been set for Dorsey's departure, although Columbia-HealthOne, Columbia's six-hospital network based in Denver, will begin searching for a replacement.
With Ron Shinkman