NYT: Hospital Giant HCA Is Close to a Record Buyout (led by Frist family)

[DeepModem Mom]

Hospital Giant HCA Is Close to a Record Buyout
By ANDREW ROSS SORKIN
Published: July 24, 2006

HCA, the nation’s largest for-profit hospital operator, was close to a deal last night to sell itself to a consortium of private equity investors for about $21 billion, people involved in the talks said. The investors would also take on about $10.6 billion of HCA’s debt, making the deal the largest leveraged buyout in history.

The buyout group is led by the family of Senator Bill Frist, the majority leader, whose father, Thomas Frist Sr., and his son, Thomas F. Frist Jr., founded HCA. The other investors are Bain Capital, Kohlberg Kravis Roberts & Company and Merrill Lynch’s private equity arm, these people said.

With a value of $31.6 billion the deal would be even larger than Kohlberg Kravis Roberts’ $25 billion acquisition of RJR Nabisco in 1989....The potential deal for HCA appears to be driven by trends both on Wall Street and in the health care industry. For one thing, the private equity business — in which investment companies pool capital from investors in order to buy companies and then sell them or take them public — is swimming in cash....As a public company, HCA, like many other for-profit hospital companies, has seen its stock perform poorly in recent years as the whole industry has struggled with increasing amounts of bad debt as more and more people do not pay their bills because they do not have sufficient health insurance or any coverage....

***

Senator Frist’s ties to the company have drawn criticism over the years as he has been active in the Senate on a variety of health-care inititiaves that have the potential to affect the large hospital company. Last fall, the Securities and Exchange Commission began an investigation into his decision to sell stock, once estimated at more than $10 million, which was held in a trust.

Senator Frist sold the stock in June, just as the price of HCA stock peaked and shortly before it fell the following month....

http://www.nytimes.com/2006/07/24/business/24hospital.html?_r=1&adxnnl=1&oref=login&adxnnlx=1153749706-Tg57nFoX+r7jES+vO2uP2A

[BR_Parkway]

1. What ever happened to that investigation? Martha's been

tried, done her time and gotten released in a shorter time span it seems.

[GeorgeGist]

2. So it's the ol'...

"Slap some lipstick on this pig" thingy again.

[rainbow4321]

3. Hmmmm..what does this mean for it's employees?

Just wondering, since I am one. Haven't heard anything at our TX facility. We did flunk JACHO a few months ago, that was quite a reality check..who the fuck flunks JACHO...the visits are announced long before they get there.

ACTUALLY, come to think of it, several of the upper brass have jumped ship (retiring earlier than expected, switching hospitals). I guess there have been signs of a change coming..and the people higher up on the food chain may have caught wind of this sale.

I do know that our hospital has lost alot of business/patients to the other local hospitals..doctors leaving our facility in whole groups (OB, cardiac)for sweeter deals down the street (we have more hospitals than Starbucks around here). Mainly cuz HCA refused to do any upgrades that the docs requested. Several emails in the past few weeks from our HCA-owned nursing agency for us to cutback on overtime, etc...as if nurses really **want** to stay over their shift..get enough nurses and we'll get out on TIME!!