COLUMBIA: Reports Drop In Profits
Columbia/HCA Healthcare Corp. yesterday posted a 53% drop in first-quarter net income from a year earlier, due in part to "losses from discontinued businesses and costs related to a federal investigation of the company's Medicare billing practices." Reuters/New York Times reports that the "world's largest health care company posted quarterly net income of $197 million, or 31 cents a diluted share, on revenues of $4.90 billion." These figures compare with $423 million in earnings for 1997 "on revenues of $4.99 billion." Goldman, Sachs analyst Deborah Lawson noted that the "results show that even with the handicap of a federal inquiry, Columbia can make money" (4/30). The Wall Street Journal reports that the results show that the company "is rebounding after a disastrous fourth-quarter" (White, 4/30). Columbia chair and CEO Dr. Thomas Frist said, "I am encouraged by the results of our first full quarter after reorganizing the company. The business plan we announced last year is being implemented and today's announcement is an indication that we're on the right track" (release, 4/29).
Restructure That Restructuring
Columbia also announced yesterday "it was revising a plan to spin off about 100 of its 336 hospitals," reducing the number of hospital groups that it plans to spin off from three to two. The company said it will "divest some of the hospitals that are part of its Atlantic Group and reposition the others ... into either one of the spinoff groups or into the Eastern or Western Groups, which will remain part of Columbia" (Reuters/Times, 4/30). The Wall Street Journal reports that despite the "change in strategy, the end result for Columbia will be the same," with the company shrinking "to a core of about 230 to 240 hospitals, down from about 350 at its peak" (4/30).
Sunset At Sunrise?
"Medicaid fraud investigators in Nevada served a grand jury subpoena yesterday on" Columbia's Sunrise Hospital and Medical Center in Las Vegas (Reuters/Times, 4/30). The Nevada Attorney General's Medicaid Fraud Control Unit "removed billing records and computer information ... for review as part of the state's continuing investigation of Sunrise" (Journal, 4/30).