Columbia/HCA Healthcare Corp., continuing its effort to shed hospitals, has decided to sell two small hospitals north of San Francisco, one to a community group and the other to a rural hospital chain.
After a few weeks' deliberation, Columbia opted to sell 49-bed Healdsburg (Calif.) General Hospital to an organization made up of community leaders and Healdsburg physicians. The Nashville-based healthcare giant had threatened to close the facility by June 2 because of a 16% decline in net revenues and a 15% falloff in admissions over the three years Columbia owned it.
Columbia also has signed a letter of intent to sell a small hospital in California to Community Health Systems, a Brentwood, Tenn.-based rural hospital chain.
The deal to sell Palm Drive Hospital, a 48-bed acute-care facility in Sebastopol, Calif., to CHS should be completed in the third quarter of 1998. Palm Drive is the sole provider of care in Sebastopol.
Healdsburg has had three owners in the past five years. Columbia inherited it when it merged with Healthtrust in 1995. Healthtrust had purchased it from Epic Healthcare Group the year before.
Now, the hospital seems destined to return to its roots as an independent not-for-profit community facility.
Nuestro Hospital, a not-for-profit corporation set up by the North County (Calif.) Hospital Association, gave Columbia a bid for the hospital April 24. The parties were still negotiating the terms last week. No details were made public.
Columbia had informed the 16-member group on May 6 of its decision to enter "exclusive negotiations" with Nues-tro and will follow up with a letter of intent, according to an association official.
Columbia said it reached its decision based on community support for Nuestro.
Because the group still has not received Columbia's letter of intent, some confusion exists about what to expect.
"We have no firm agreement at this time," said Mary Schwind, chief executive officer of Healdsburg General.
"They might come back with a counteroffer that we can't live with," said Kendra Parry, a principal with the Westport Group, an Augusta, Maine-based healthcare consulting firm hired by the North County Hospital Association.
Daniel Rose, M.D., chairman of Nues-tro, said: "There's no uncertainty in my mind. Columbia said they would move forward to sell (the hospital). You would conclude that our offer was attractive (to them)."
Nuestro beat out bids from a few California health systems, whose names were not disclosed.
If negotiations are concluded successfully, Nuestro will expand its current board from three to about a dozen members, Rose said. The board will include physicians, hospital employees and community members.
-With Kristen Hallam