HCA to sell River Park Hospital
Hospital Corporation of America, the nation’s largest investor-owned hospital chain, announced Monday it will be selling 10 of its facilities, including Warren County’s River Park Hospital.
Citing higher costs and increased patient volume for its decision to divest itself of the units, which are spread across six states, HCA chairman and CEO Jack O. Bovender, Jr. said the sale of the mostly rural facilities will allow the company to concentrate on growth in larger markets.
“The divestitures will allow the company to redeploy capital to support our hospitals in growing urban markets,” Bovender said in a statement.
Bovender said the move was not based on the performance of the affected hospitals, and that the facilities should be able to continue to do well.
“These facilities are viable community assets. We believe that increased focus and attention and the ability to continue to successfully compete for capital should provide these facilities the best opportunity for success in the future,” said Bovender. “Many of the facilities to be divested have been a part of HCA for several years and, although it was a difficult decision, we believe the divestitures are in the best long-term interests of the company, the affected hospitals and their local communities.”
HCA is the nation’s leading provider of health care services with approximately 190 hospitals and 91 outpatient surgery centers in 23 states, England and Switzerland.
At its founding in 1968, HCA was one of the nation’s first hospital companies. Total revenues for the company in 2003 were $21.8 billion, and company assets were over $21 billion. As of 2003, HCA employed approximately 190,000 people.
Two hospitals in Tennessee will be put on the market, River Park, with 127 beds, and Grandview Medical Center in Jasper, which has 70 beds. River Park currently employs 340 full- and part-time personnel.
River Park CEO Steve Otto said the sale, though surprising to many, should not have a major effect on River Park’s future. He pointed out the move, as HCA has stated, is simply the result of a change in corporate strategy.
“I think it will be a very positive thing,” Otto said, “and let me explain why. HCA has been very good to River Park Hospital and McMinnville and Warren County. I mean, there’s no question, they’ve really brought a lot of things to the table.
“However, we are a small fish in a big pond with very large fish that we compete with. We compete for management attention, we compete for capital dollars, and that’s all difficult when we’re last on the food chain.
“And that’s really the premise that’s behind this sale,” Otto continued. “HCA has decided that they’re going to concentrate their management focus and their strategies around those urban and suburban areas where they’ve got clusters of hospitals. And we just don’t fit that profile.”
Otto said HCA feels a new owner with a different focus might be a better fit for River Park.
“They feel like with a new owner that concentrates on rural communities, much like ours, that the hospital will do much better,” Otto said. “And I agree. I think we’ll have much more access to capital, and to that management focus that we might not have had in a bigger company.”
Otto answered rumors that local physicians are putting together a package to try and buy the facility.
“That very well could be true,” Otto said. “I can only say, and again, I’m not the owner of the hospital, I’m the operator, but I know HCA has publicly said that their intent would be to sell all 10 of these hospitals together, because there is some synergy around them and they’re very similar, so their initial intent will be to sell all 10 to someone who will buy and operate these 10 hospitals.
“That being said, they’re always going to be open to negotiation, so if that doesn’t happen, then they may decide to sell the hospitals independently. And whether the local physicians are interested in buying the hospital, that’s really up to them.”
Most importantly, Otto wanted to assure local residents that River Park is here to stay.
“Don’t be too concerned about anything changing,” Otto said. “It’s going to be business as usual here. We’re going to continue to focus really hard on patient care up to the sale, and whoever owns this hospital, River Park Hospital will continue to be here and to provide great care.”