So far this year, some of the biggest healthcare news headlines have come from the nation’s for-profit hospital companies.
Mergers, acquisitions, joint ventures, lawsuits and everything in between have been carried out and observed across these companies. They stand to gain heavily from the Patient Protection and Affordable Care Act’s provisions, such as Medicaid expansion and the health insurance mandate, and many have also led efforts in accountable care under healthcare reform.
As the healthcare world heads into September, here are some snippets of information to know about the 10 largest for-profit hospital operators in the country. Companies are presented in order by number of hospitals owned.
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Hospital Corp. of America (Nashville, Tenn.)
Currently, Richard Bracken serves as CEO and chairman of HCA, the largest for-profit hospital company in the United States. However, in July, Mr. Bracken announced he would retire as CEO by the end of this year and would stay on as chairman through 2014. HCA President and CFO Milton Johnson will become HCA’s new CEO.
HCA currently owns and operates 161 hospitals and 114 ambulatory surgery centers, although three more hospitals are potentially on the way. In July, HCA signed a definitive agreement with IASIS to acquire three Florida hospitals. HCA posted $1.6 billion in profit in 2012 and $33 billion in revenue. EBITDA in the past 12 months was roughly $6.6 billion.
HCA has been one of the largest hospital companies in the industry for the past decade. In 2006, Bain Capital, Kohlberg Kravis Roberts & Co., Merrill Lynch and family members of HCA co-founder Tommy Frist Jr., MD, completed a leveraged buyout of HCA for roughly $32 billion — a record at the time. HCA then went public again in 2010 with a $4.6 billion initial public offering. Over the past year, HCA has also been under scrutiny. Last August, the New York Times ran two investigative pieces that criticized the company’s cardiac procedures and emergency department practices.
Community Health Systems (Franklin, Tenn.)
Wayne Smith serves as chairman, president and CEO of CHS and has been with the company since 1997. Larry Cash, executive vice president and CFO, has also been with CHS since 1997.
CHS has been one of the most active for-profit hospital operators in the past few months. At the end of July, CHS said it will acquire Health Management Associates in a deal valued at $7.6 billion. CHS currently has 135 hospitals within its portfolio, but if the merger is approved, it would become the largest for-profit hospital company in terms of number of hospitals. It ranks only behind HCA in terms of profit and revenue. In 2012, CHS recorded $265.6 million in net income and $13 billion in revenue.
CHS, founded in 1985, has experienced most of its growth over the past decade. In 2007, CHS bought Plano, Texas-based Triad Hospitals — a spinoff company of the former HCA/Columbia Healthcare — in a deal worth $6.8 billion, adding more than 50 hospitals to the company’s base. CHS has also been flagged with federal investigations. The Department of Justice continues to look into CHS’ Medicare short-stay admissions from emergency departments, an investigation that has been ongoing for more than two years.
Date: September 04, 2013