Columbia/HCA Healthcare Corp. did not have to look farther than two blocks down the street to find a taker for one of its underperforming hospitals in Orlando, Fla.
And the for-profit Nashville-based company did not balk at selling to a competitor.
Orlando Regional Healthcare System, a not-for-profit Florida system and one of Columbia's chief rivals in the Orlando market, has agreed to buy Columbia's 267-bed Lucerne Medical Center. Neither Columbia nor Orlando Regional would disclose terms of the deal.
While Lucerne lost more than $4 million on net patient revenues of $74 million last year, nearby Orlando Regional Medical Center, with 517 beds, was operating at 10% beyond its normal capacity, according to a spokesman.
Orlando Regional Healthcare System also includes 281-bed Arnold Palmer Hospital for Children and Women, in Orlando; 294-bed Leesburg (Fla.) Regional Medical Center; 153-bed Sand Lake Hospital, in Orlando; 68-bed South Lake Hospital, in Clermont, Fla.; 206-bed South Seminole Hospital, in Longwood, Fla.; and 84-bed St. Cloud (Fla.) Hospital.
Joe Brown, spokesman for Orlando Regional Healthcare System, said talks between the two companies had been brewing since last year and intensified during the past several months.
"We weren't really on the sale block," said Lisa Schultz, director of business development at Lucerne. "What we've been working on are joint projects. What ended up happening is that instead of doing all these joint projects, they just said, 'We think it would be neat to purchase you.' "
The other major player in the Orlando area, Winter Park, Fla.-based Adventist Health System, owns Orlando-based Florida Hospital, which operates 1,354 beds at several locations.
"We did also look at (Lucerne) and decided not to pursue it," said Sandra Johnson, vice president of business development for not-for-profit Adventist. "It was not in our best interests at the time."
Columbia spokesman Jeff Prescott said the decision to sell the Orlando hospital fits within Columbia's recent strategy of paring down and focusing on its core facilities in markets where it is a leader. According to the American Hospital Association, Columbia operated about 9% of the staffed beds in Orange County, Fla., in 1998.
"We thought it would be a better fit for (Orlando Regional Healthcare System) than for us," Prescott said.