Newspaper article THE JOURNAL RECORD

Columbia Foreges Outpatient Center Alliance

Newspaper article THE JOURNAL RECORD

Columbia Foreges Outpatient Center Alliance

Article excerpt

By Mariann Caprino

Associated Press

Columbia Healthcare Corp., a fast-growing hospital company, has forged an alliance with Medical Care America Inc., which runs outpatient surgery centers in a move that further integrates their health care offerings.

The announcement Thursday came less than a week after Columbia, the nation's largest for-profit hospital chain, said it would acquire HCA-Hospital Corp. of America in a $5.7 billion stock-swap deal.

Based in Dallas, Medical Care America is the nation's largest operator of outpatient surgery centers. The company's infusion services division administers intravenous drugs and nutrients to patients in their homes.

Under terms of their agreement, the two companies will jointly provide hospital, outpatient surgery and infusion services in overlapping markets. They also will negotiate joint contracts with third-party payers like insurance and managed care companies and employers.

Columbia and Medical Care also agreed to enter into joint ownership arrangements in nine markets located in the states of Alabama, Arizona, Florida, Kansas, Missouri and Texas.

Financial terms were not disclosed.

In New York Stock Exchange trading, Medical Care closed down 12 cents at $20 a share; Columbia shares were off 37 cents to $28.37.

The deal illustrates the speed with which health care companies are expanding through affiliations and mergers to better position themselves to compete once reform takes hold. Although President Clinton's plan to revamp the nation's $900 billion medical system is not likely to be in place fully for several years, health care companies and medical professionals already have embraced the goal of cost containment.

Donald Steen, president and chief executive of Medical Care, said the agreement "demonstrates that hospitals and surgical centers can work together cooperatively to provide the best possible delivery system for health care at the lowest possible cost. …

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