Like Sherman through Georgia, Hillcrest HealthCare System accelerated its march through northeastern Oklahoma last week by agreeing to buy three hospitals from Columbia/HCA Healthcare Corp.
The three Tulsa facilities-255-bed Tulsa Regional Medical Center, 121-bed Doctors Hospital and 45-bed Specialty Hospital of Tulsa-are being carved out of Pacific Group, a Columbia spinoff.
The Pacific Group consisted of 42 hospitals when Nashville-based Columbia announced last November that it was divesting itself of three groups of hospitals (Nov. 24, p. 2). The other two spinoffs are the 45-hospital Atlantic Group and the 21-hospital America Group.
The Pacific Group will retain two hospitals in the region, 79-bed Claremore Regional Medical Center in Claremore and 100-bed Wagoner Community Hospital in Wagoner.
Hillcrest and Columbia have been in a joint venture to build SouthCrest Hospital in southeast Tulsa, now under construction. The Pacific Group will con-tinue to collaborate on that project and operate the facility once it's finished.
"We thought it would be best for those (three) facilities to be aligned with the local player, not unlike other areas of the country," said Jeff Prescott, Columbia spokesman.
The entire Pacific Group spinoff should be completed by mid-1999, Prescott said. "Pretty soon we will have the rest of the consortium sale. That will be most of the Atlantic Group. Then the divestiture will be coming close to completion."
Sources in Tulsa described the three hospitals Hillcrest is acquiring as "not at the top of the market" in terms of public perception. Yet a financial report from HCIA, a Baltimore-based healthcare information company, revealed Tulsa Regional Medical Center to be a highly profitable operation. It made a 9.2% operating profit in the 1997 fiscal year, earning $10.4 million on $110.3 million in net patient revenues. Cost reports on the other two hospitals were not available from HCIA.
As of April 30, 1998, Tulsa-based Hillcrest was reporting $600 million in system revenues and $450 million in system assets. It had a total of 1,137 licensed acute-care beds and 338 long-term or skilled-nursing beds in northeastern Oklahoma.
With the addition of the three new hospitals, Hillcrest will control 894 of the 2,379 beds in Tulsa.
In a related matter, Duke University Health System, Durham, N.C., completed the purchase of Raleigh (N.C) Community Hospital from Columbia. Raleigh is one of the Atlantic Group hospitals Columbia agreed to sell to a consortium of not-for-profit buyers for $1.2 billion. Columbia has closed deals for 16 hospitals.
Duke did not release the purchase price. An application for bond financing filed with the North Carolina Medical Care Commission revealed it expected to pay $200 million.
-With Karen Pallarito