Columbia's Consulting Deal at University Dropped

Article excerpt

University Medical Center said yesterday it has stopped paying

Columbia/HCA Healthcare for management consulting after getting

pointers for seven months on how to cut costs at the

cash-strapped hospital.

By mutual agreement, University stopped logging a

$150,000-a-month fee to Columbia.

"They agreed starting Oct. 1 that the reviews they were

performing for us were not" worth the fee, said University Chief

Executive Officer W.A. McGriff III.

The $150,000-a-month consulting agreement had been an interim

piece of University's deal with Columbia.

It allowed the struggling medical center to move forward with

management changes while awaiting an IRS decision on whether

tax-exempt University could join Columbia's hospital system.

The pending agreement would divide the combined pre-tax

earnings of University, Columbia Memorial Hospital and Columbia

Orange Park Medical Center between Columbia and University on a

78 percent, 22 percent split.

University's top four executives would also be employees of

Columbia, and the company would also receive a management fee.

University gains through being part of a greater hospital

system, McGriff said.

Between last March and September, University received, but has

not yet paid for, advice worth $1.05 million from Columbia. The

hospital gained good value from this advice, McGriff said.

Columbia assisted University in revising its staffing,

improving its productivity, increasing its Medicaid and Medicare

reimbursement, and cutting its contracting and purchasing costs,

McGriff said. …