Getting back to basics is how hospital companies have described their ongoing exits from money-losing businesses like home health and physician practice management.
But Internet ventures are apparently within the domain of core business activities for at least two major hospital operators.
Eager not to miss the dot-com train, Columbia/HCA Healthcare Corp. and Tenet Healthcare Corp., the nation's two largest for-profit hospital companies, separately launched e-commerce procurement companies last week.
Neither would say whether the timing of the announcements, within a day of each other, was coincidence, but both companies are clearly trying to lure vendors and buyers by trumpeting their new endeavors.
Santa Barbara, Calif.-based Tenet was the first to announce its venture, a partnership with Mountain View, Calif.-based Chemdex Corp., a company that provides industry-specific e-commerce products.
Tenet opted to transfer assets of its group purchasing division, BuyPower, which manages 400 vendor contracts with $3 billion in annual purchases, to the new company. BuyPower is also used by non-Tenet hospitals.
The new company has yet to be named, but Jeffrey Barbakow, Tenet's chairman and chief executive officer, and Trevor Fetter, Tenet's chief corporate officer, will be directors. David Perry, Chemdex's president and CEO, will be chairman of the board. The Internet company is still looking for a CEO.
Not to be outdone, Columbia backed another e-commerce launch last week.
The Nashville-based hospital company agreed to provide up to $40 million in start-up funding for empactHealth.com, an e-procurement company. Columbia's more than 200 hospitals and $3 billion in annual purchasing power will be the customer base for this start-up, which has yet to announce any vendor contracts. The company hopes to be up and running during the first quarter of 2000.
Columbia is the majority owner of empactHealth.com, said its president and CEO, J. Edward Pearson Jr.
Having a partner like Columbia will give the business the boost it needs, he said.
"It's important for the industry leader to step up and take a role in priming the pump, if you will," Pearson said.