Hospital Corporation of America
Encyclopedia
Hospital Corporation of America (HCA) is the largest private operator of health care
facilities in the world, It is based in Nashville
, Tennessee
and is widely considered to be the single largest factor in making that city a hotspot for healthcare enterprise.
and Dr. Thomas Frist, Sr, grandfather of former U.S. Senate majority leader Bill Frist
. Richard M. Bracken is the current CEO of HCA.
During the 1970s-1980s the corporation went through a tremendous growth period acquiring hundreds of hospitals across the United States which numbered 255 owned and 208 which HCA managed.
In 1989, the hospital operator was acquired for $5.3 billion in a management buyout
led by Chairman Thomas J. Frist and completed a successful initial public offering
in the 1990s. In 1993 HCA merged with Louisville
-based Columbia Hospital Corporation to form Columbia/HCA. In April 1998 Birmingham
, Alabama
-based HealthSouth Corporation announced it was acquiring the majority of HCA's surgical division.
On March 19th, 1997, investigators from the FBI, the Internal Revenue Service and the Department of Health and Human Services served search warrants at Columbia/HCA facilities in El Paso and on dozens of doctors with suspected ties to the company. Following the raids, the Columbia/HCA board of directors forced Rick Scott to resign as Chairman and CEO. He was paid a settlement of $9.88 million, and left with 10 million shares of stock worth over $350 million, mostly from his initial investment. In 1999, Columbia/HCA changed its name back to HCA, Inc.
In settlements reached in 2000 and 2002, Columbia/HCA pleaded guilty to 14 felonies. They admitted systematically overcharging the government by claiming marketing costs as reimbursable, by striking illegal deals with home care agencies, and by filing false data about use of hospital space.
HCA also admitted fraudulently billing Medicare and other health programs by inflating the seriousness of diagnoses and to giving doctors partnerships in company hospitals as a kickback for the doctors referring patients to HCA. They filed false cost reports, fraudulently billing Medicare for home health care workers, and paid kickbacks in the sale of home health agencies and to doctors to refer patients. In addition, they gave doctors "loans" never intending to be repaid, free rent, free office furniture, and free drugs from hospital pharmacies.
In late 2002, HCA agreed to pay the U.S. government $631 million, plus interest, and pay $17.5 million to state Medicaid agencies, in addition to $250 million paid up to that point to resolve outstanding Medicare expense claims. In all, civil law suits cost HCA more than $2 billion to settle, by far the largest fraud settlement in US history.
The name subsequently reverted to "Hospital Corporation of America." HCA abandoned the use of its name in its home market and instead promotes its Nashville hospitals under the TriStar brand.
On July 1, 2005, Senator Frist sold all of his HCA shares two weeks before disappointing earnings sent the stock on a 9-point plunge. Frist claimed that he sold his shares to avoid the appearance of a conflict of interest if he ran for president. Other executives sold their stock at the same time. Shareholders sued HCA in a lawsuit alleging that the company made false claims about their profits to drive up the price which then fell when the company reported disappointing financial results. The lawsuit was settled in August 2007 with HCA agreeing to pay $20 million to the shareholders.
In 2006, Kohlberg Kravis Roberts and Bain Capital
, together with Merrill Lynch
and the Frist family (which had founded the company) completed a $31.6 billion acquisition of the hospital company, making the company privately-held again 17 years after it was taken private for the first time in a management buyout. At the time of its announcement, the HCA buyout would be the first of several to set new records for the largest buyout, eclipsing the 1989 buyout of RJR Nabisco
. It would later be surpassed by the buyouts of Equity Office Properties and TXU
.
On Friday May 7, 2010, HCA announced the corporation will once again go public with an expected 4.6 billion dollar IPO.
Also in May 2010, one of the company's facilities, Centerpoint Medical Center, found itself at the center of controversy when a labor and delivery nurse, Dixie Van Hercke, concerned about the welfare of an infant born to blind parents, contacted the Missouri Department of Social Services. The infant was subsequently placed in foster care for 57 days until advocacy efforts spearheaded by the National Federation of the Blind resulted in the infant's return to her parents. A lawsuit has been threatened with the baby's parents and disability rights organizations alleging that Centerpoint, HCA of the Midwest and Hospital Corporation of America fail to properly train employees in the area of disability awareness. The actions of Ms. Van Hercke, Centerpoint and the Missouri Department of Social Services were also soundly condemned by parents' groups and organizations that support the rights of breast feeding mothers.
On March 10, 2011, HCA listed on the NYSE after raising $3.8 billion in the largest ever private equity-backed IPO on a US exchange to date.
. The London sites include The Harley Street Clinic, The Lister Hospital, London Bridge Hospital
, The Portland Hospital
, The Princess Grace Hospital and The Wellington Hospital
. In August 2007, HCA sold its hospitals in Switzerland due to decreasing revenue.
The Princess Grace Hospital has become nationally and internationally renowned for excellence in the field of breast cancer and surgery, aided by its experts in the field, Professor Kefah Mokbel
and Dr. Nick Perry who, in 2005, founded The London Breast Institute.
Health care
Health care is the diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in humans. Health care is delivered by practitioners in medicine, chiropractic, dentistry, nursing, pharmacy, allied health, and other care providers...
facilities in the world, It is based in Nashville
Nashville, Tennessee
Nashville is the capital of the U.S. state of Tennessee and the county seat of Davidson County. It is located on the Cumberland River in Davidson County, in the north-central part of the state. The city is a center for the health care, publishing, banking and transportation industries, and is home...
, Tennessee
Tennessee
Tennessee is a U.S. state located in the Southeastern United States. It has a population of 6,346,105, making it the nation's 17th-largest state by population, and covers , making it the 36th-largest by total land area...
and is widely considered to be the single largest factor in making that city a hotspot for healthcare enterprise.
History
The founders of HCA include Jack C. MasseyJack C. Massey
Jack Carroll Massey , Venture capitalist and entrepreneur, born 1904 in Tennille, Georgia. In 1964, after a career in the medical supply industry, he bought Kentucky Fried Chicken from its founder, Harland Sanders, for $2 million. Seven years later he sold it for $239 million...
and Dr. Thomas Frist, Sr, grandfather of former U.S. Senate majority leader Bill Frist
Bill Frist
William Harrison "Bill" Frist, Sr. is an American physician, businessman, and politician. He began his career as an heir and major stockholder to the for-profit hospital chain of Hospital Corporation of America. Frist later served two terms as a Republican United States Senator representing...
. Richard M. Bracken is the current CEO of HCA.
During the 1970s-1980s the corporation went through a tremendous growth period acquiring hundreds of hospitals across the United States which numbered 255 owned and 208 which HCA managed.
In 1989, the hospital operator was acquired for $5.3 billion in a management buyout
Management buyout
A management buyout is a form of acquisition where a company's existing managers acquire a large part or all of the company.- Overview :Management buyouts are similar in all major legal aspects to any other acquisition of a company...
led by Chairman Thomas J. Frist and completed a successful initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
in the 1990s. In 1993 HCA merged with Louisville
Louisville, Kentucky
Louisville is the largest city in the U.S. state of Kentucky, and the county seat of Jefferson County. Since 2003, the city's borders have been coterminous with those of the county because of a city-county merger. The city's population at the 2010 census was 741,096...
-based Columbia Hospital Corporation to form Columbia/HCA. In April 1998 Birmingham
Birmingham, Alabama
Birmingham is the largest city in Alabama. The city is the county seat of Jefferson County. According to the 2010 United States Census, Birmingham had a population of 212,237. The Birmingham-Hoover Metropolitan Area, in estimate by the U.S...
, Alabama
Alabama
Alabama is a state located in the southeastern region of the United States. It is bordered by Tennessee to the north, Georgia to the east, Florida and the Gulf of Mexico to the south, and Mississippi to the west. Alabama ranks 30th in total land area and ranks second in the size of its inland...
-based HealthSouth Corporation announced it was acquiring the majority of HCA's surgical division.
On March 19th, 1997, investigators from the FBI, the Internal Revenue Service and the Department of Health and Human Services served search warrants at Columbia/HCA facilities in El Paso and on dozens of doctors with suspected ties to the company. Following the raids, the Columbia/HCA board of directors forced Rick Scott to resign as Chairman and CEO. He was paid a settlement of $9.88 million, and left with 10 million shares of stock worth over $350 million, mostly from his initial investment. In 1999, Columbia/HCA changed its name back to HCA, Inc.
In settlements reached in 2000 and 2002, Columbia/HCA pleaded guilty to 14 felonies. They admitted systematically overcharging the government by claiming marketing costs as reimbursable, by striking illegal deals with home care agencies, and by filing false data about use of hospital space.
HCA also admitted fraudulently billing Medicare and other health programs by inflating the seriousness of diagnoses and to giving doctors partnerships in company hospitals as a kickback for the doctors referring patients to HCA. They filed false cost reports, fraudulently billing Medicare for home health care workers, and paid kickbacks in the sale of home health agencies and to doctors to refer patients. In addition, they gave doctors "loans" never intending to be repaid, free rent, free office furniture, and free drugs from hospital pharmacies.
In late 2002, HCA agreed to pay the U.S. government $631 million, plus interest, and pay $17.5 million to state Medicaid agencies, in addition to $250 million paid up to that point to resolve outstanding Medicare expense claims. In all, civil law suits cost HCA more than $2 billion to settle, by far the largest fraud settlement in US history.
The name subsequently reverted to "Hospital Corporation of America." HCA abandoned the use of its name in its home market and instead promotes its Nashville hospitals under the TriStar brand.
On July 1, 2005, Senator Frist sold all of his HCA shares two weeks before disappointing earnings sent the stock on a 9-point plunge. Frist claimed that he sold his shares to avoid the appearance of a conflict of interest if he ran for president. Other executives sold their stock at the same time. Shareholders sued HCA in a lawsuit alleging that the company made false claims about their profits to drive up the price which then fell when the company reported disappointing financial results. The lawsuit was settled in August 2007 with HCA agreeing to pay $20 million to the shareholders.
In 2006, Kohlberg Kravis Roberts and Bain Capital
Bain Capital
Bain Capital LLC is a Boston-based private equity firm founded in 1984 by partners from the consulting firm Bain & Company. Originally conceived as an early-stage, growth-oriented investment fund, Bain Capital today manages approximately $65 billion in assets, and its strategies include private...
, together with Merrill Lynch
Merrill Lynch
Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
and the Frist family (which had founded the company) completed a $31.6 billion acquisition of the hospital company, making the company privately-held again 17 years after it was taken private for the first time in a management buyout. At the time of its announcement, the HCA buyout would be the first of several to set new records for the largest buyout, eclipsing the 1989 buyout of RJR Nabisco
RJR Nabisco
RJR Nabisco, Inc., was an American conglomerate formed in 1985 by the merger of Nabisco Brands and R.J. Reynolds Tobacco Company. RJR Nabisco was purchased in 1988 by Kohlberg Kravis Roberts & Co...
. It would later be surpassed by the buyouts of Equity Office Properties and TXU
TXU
Energy Future Holdings Corporation is an electric utility company headquartered in Energy Plaza in Downtown Dallas, Texas, United States. The company was known as TXU until its $45 billion leveraged buyout by Kohlberg Kravis Roberts, Texas Pacific Group and Goldman Sachs...
.
On Friday May 7, 2010, HCA announced the corporation will once again go public with an expected 4.6 billion dollar IPO.
Also in May 2010, one of the company's facilities, Centerpoint Medical Center, found itself at the center of controversy when a labor and delivery nurse, Dixie Van Hercke, concerned about the welfare of an infant born to blind parents, contacted the Missouri Department of Social Services. The infant was subsequently placed in foster care for 57 days until advocacy efforts spearheaded by the National Federation of the Blind resulted in the infant's return to her parents. A lawsuit has been threatened with the baby's parents and disability rights organizations alleging that Centerpoint, HCA of the Midwest and Hospital Corporation of America fail to properly train employees in the area of disability awareness. The actions of Ms. Van Hercke, Centerpoint and the Missouri Department of Social Services were also soundly condemned by parents' groups and organizations that support the rights of breast feeding mothers.
On March 10, 2011, HCA listed on the NYSE after raising $3.8 billion in the largest ever private equity-backed IPO on a US exchange to date.
Facilities
, HCA operated 173 hospitals and 107 freestanding surgery centers located in 20 U.S. states and LondonLondon
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
. The London sites include The Harley Street Clinic, The Lister Hospital, London Bridge Hospital
London Bridge Hospital
The London Bridge Hospital is a private hospital on the south bank of the River Thames in London.-History:The hospital opened in 1986 following redevelopment of Chamberlain's Wharf. Architects Llewelyn Davies Weeks, Consulting Engineers Oscar Faber, Main Contractor Bovis Construction...
, The Portland Hospital
Portland Hospital
The Portland Hospital for Women and Children, usually referred to simply as the Portland Hospital, is a hospital in Great Portland Street, London...
, The Princess Grace Hospital and The Wellington Hospital
Wellington Hospital, United Kingdom
The Wellington Hospital in London is the largest independent hospital in the United Kingdom, located in St John's Wood, North London.It has an international reputation for outstanding care in areas of medicine including cardiac services, neurosurgery, liver and HPB medicine, rehabilitation,...
. In August 2007, HCA sold its hospitals in Switzerland due to decreasing revenue.
The Princess Grace Hospital has become nationally and internationally renowned for excellence in the field of breast cancer and surgery, aided by its experts in the field, Professor Kefah Mokbel
Kefah Mokbel
Professor Kefah Mokbel MB BS MS FRCS is the lead breast surgeon at the London Breast Institute of the Princess Grace Hospital, an honorary consultant breast surgeon at St George's Hospital, Professor of Breast Cancer Surgery at The Brunel Institute of Cancer Genetics and Pharmacogenomics and the...
and Dr. Nick Perry who, in 2005, founded The London Breast Institute.
See also
- HCA Midwest DivisionHCA Midwest DivisionThe following Kansas City area hospitals are affiliated with the HCA Midwest Division:*Allen County Hospital - Iola, Kansas*Centerpoint Medical Center - Independence, Missouri - replaces Medical Center of Independence and is the renamed successor/replacement to Independence Regional Health Center...
- Richard L. Scott (aka Rick Scott) (former Chairman and CEO)
- Jack Bovender (former Chairman and CEO from 2002 to 2009)