Three not-for-profit healthcare buyers have begun to integrate 14 hospitals and related healthcare facilities they acquired last week for $680 million from Columbia/HCA Healthcare Corp.
Alliant Health System, Louisville, Ky.; Baptist Health, Montgomery, Ala.; and Johnson City (Tenn.) Medical Center each completed their purchases Aug. 31 and assumed control of the facilities Sept. 1.
The buyers are part of an eight-member, four-state consortium that negotiated an unprecedented bulk purchase of 22 facilities from the Nashville-based chain. Columbia has since pulled one facility, Brunswick Hospital in Supply, N.C., out of the deal.
Last week's transaction completes more than half of the deal. The entire transaction will be worth $1.2 billion to Columbia when completed. New York-based Salomon Smith Barney represented the buyers.
Columbia previously sold its 50% stake in Presbyterian-Orthopaedic Hospital in Charlotte, N.C., for $60 million. The buyer, Winston-Salem, N.C.-based Novant Health, owned the other 50%. Deals with four other buyers are expected to be completed by the end of the month.
By passing Federal Trade Commission scrutiny, consortium members cleared the highest hurdle threatening to trip up the deal. However, North Carolina's attorney general continues to review a proposed purchase of Columbia's Cape Fear Memorial Hospital in Wilmington by New Hanover Regional Medical Center, also in Wilmington.
It may be months before all of the Columbia facilities are fully integrated within each buyer's network. But the initial consolidation work has begun.
Already Baptist has renamed the four hospitals it acquired and hung temporary signs. The system plans to increase nursing staff to align the Columbia facilities' staffing ratios with Baptist's own standards. "They were a little thin at the bedside," said Rick Derrick, a Baptist spokesman.
As a condition of the deal, each buyer agreed to retain substantially all of Columbia's employees. In recent months, though, a number of Columbia's hospital administrators have either resigned or were not offered positions.
In August, for example, Alliant named four new chief administrative officers to replace CEOs at the four facilities it was acquiring.
Johnson City Medical Center, which acquired six hospitals in the deal, retained one Columbia administrator to assist in the transition. Johnson City also has revamped its operational structure. Its newly created Washington County (Tenn.) Operations division, for example, is headed by three vice presidents who have oversight responsibilities for Johnson City and three of the acquired hospitals.
"We still need to come up with a new system name and logo," said Johnson City spokesman Dennis Oerly.