Everyone wants to be healthcare's 700-pound gorilla, but not-for-profit giant Catholic Healthcare West may have discovered that the role means you occasionally trip over your own hubris.
Industry sources say San Francisco-based CHW-one of the largest hospital chains in the West-may have let its exalted view of itself hamstring a bid to buy or create a joint venture with two hospitals owned by not-for-profit Baptist Hospitals and Health Systems in Phoenix.
CHW's presentation of its proposal to Baptist trustees and executives was said to be heavy-handed and arrogant. Ira Ehrlich, M.D., chairman of the board of CHW-affiliated 514-bed St. Joseph's Hospital and Medical Center in Phoenix, was present when the pitch was made. Although he won't confirm that the CHW representatives were copping an attitude, Ehrlich does say the proposal "was not communicated in the best possible fashion."
Bill Foley, president of CHW Arizona, says CHW's presentation could have been interpreted as more vague than the Vanguard offer. He notes his organization's proposal centers around a merger of the hospitals into CHW, rather than the outright purchase proposed by Vanguard.
"Monetarily, we focused on the capital needs of the combined organization, rather than just a straightforward buyout," he says.
CHW probably didn't go in with the strongest position anyway. Sources say Nashville-based for-profit Vanguard Health Systems, which is much smaller, apparently made a better offer for 222-bed Phoenix Baptist Hospital and Medical Center and 104-bed Arrowhead Community Hospital and Medical Center in Glendale, Ariz.-perhaps as much as $25 million higher. Ehrlich doesn't deny that Vanguard made a higher offer, but he won't give any details. He emphasizes that talks with both parties are continuing.
Can you play the Columbia game? With more than 20 analysts already covering Columbia/HCA Healthcare Corp., the new kid on the Wall Street block apparently figured she needed to do something extra to stand out.
So when Leslie Henshaw at ING Barings, New York, started covering Columbia early this month, she issued a brain-teasing trivia contest as a companion to her traditional report.
"It has been such a miserable 12 months for anyone remotely involved in health services investing. We needed a little levity," she says.
Here are a few quiz questions to whet your appetite, with the answers below:
* Crossword clue 27-across: Who said "I would have rather seen (Frist) make his money in Kentucky Fried Chicken"? (6 letters)
* Which business was once important to Columbia's earnings?
a) Manufacture of continuous passive-motion devices
b) Distribution of office-based laboratory tests
c) Provision of geriatric day-care service
* Match the year (1994, 1995, 1996) to the Columbia statement:
"The Columbia Homecare Group is one of the fastest-growing sectors in our Company."
"One part of this strategy is our effort to become the world's premier health information resource online."
"These (nonurban) facilities support the metropolitan networks by providing a source of referrals for more-sophisticated service. . . . "
(In order, the answers are Relman, for former New England Journal of Medicine editor Arnold Relman, M.D.; a; and 1995, 1996 and 1994.)
Welcome to the 1990s. Some hospitals apparently haven't gotten the message that it's illegal to discriminate in hiring.
The National Association of Physician Recruiters announced a "major education effort" this month to educate its members and healthcare employers about anti-discrimination laws. It follows a recruiting firm's recent complaint to the association. The subject of the complaint was a hospital system that requested a physician who was "American-born," "American-trained" and "nonminority." The offending notice was posted to several recruitment firms, said Matthew Jones, a Naperville, Ill.-based recruiter and chairman of the association's ethics committee.
The 300-member association, based in Altamonte Springs, Fla., was founded in 1984, largely to address ethical issues in physician recruitment.
Michael Broxterman, chief operating officer of Atlanta-based Pinnacle Health Group and a member of the association's board, said it's tough for recruitment firms to police their own clients. "Everybody knows about anti-discrimination laws, but in this industry do they follow them? Well, not always," he said.
The dealer. Known on Capitol Hill as a car buff and spirited debater, Rep. William Thomas (R-Calif.) also could be a good high-stakes poker player.
Outliers recently obtained an exchange of e-mail among House aides showing how Thomas, chairman of the House Ways and Means health subcommittee, outfoxed the House Commerce Committee and its aides when they were negotiating increased Medicare reimbursements for rural hospitals.
In an angry e-mail to Roland Foster-an aide to Rep. Tom Coburn (R-Okla.), the vice chairman of the Commerce Committee's health subcommittee-staffers reported that Thomas surprised Commerce Committee Chairman Tom Bliley Jr. (R-Va.) with a deal on rural hospital provisions that Thomas claimed he had worked out with Coburn.
The Commerce Committee aides wrote that Foster and Coburn should have informed Bliley of any developments and shouldn't have cut a deal behind his back. They concluded the memo with this ominous statement: "This one is going into the ledger, Roland . . . something the health team will store away for future use."
Not so, Foster responded. He told the committee aides that Coburn, a physician retiring from Congress at the end of this term, made no such deal and that they had been snookered by Thomas' bluff.
"Did you ever think to call and ask us if we ever signed off on a deal with Mr. Thomas?" Foster asked. "Instead, you went along with his bluff, which gives me great confidence in the negotiations."