10 Things to Know About HCA

Hospital Corporation of America is one of the largest for-profit healthcare providers in the world, and it plays an especially large role in the United States.

Here are 10 things to know about HCA, headquartered in Nashville, Tenn.

1. Three men founded HCA in 1968: Thomas Frist Sr., MD, Thomas Frist Jr., MD, and Jack Massey. Dr. Frist Sr., who was the father of former U.S. Senate majority leader Bill Frist, built Park View Hospital in Nashville with a group of physicians. They wanted to manage and expand the hospital, eventually creating the hospital management company known as HCA.

2. HCA has gone through numerous mergers and transactions, and it's also served as the epicenter for many popular hospital company spinoffs that are still around today. One of the company's biggest deals occurred in 1994, when HCA merged with Columbia. At that time, this deal left HCA with more than 350 hospitals and 145 ambulatory surgery centers — the largest HCA has ever been. Rick Scott, now governor of Florida, served as chairman and CEO at the time. During the next several years, though, HCA reorganized and decided to sell off certain groups of hospitals. This eventually led to the creation of Brentwood, Tenn.-based LifePoint Hospitals and Plano, Texas-based Triad Hospitals. Community Health Systems in Franklin, Tenn., later bought Triad in 2007 in a deal worth $6.8 billion.

3. In 2006, Bain Capital, Kohlberg Kravis Roberts & Co., Merrill Lynch and family members of HCA co-founder Dr. Frist Jr. completed a leveraged buyout of HCA for roughly $33 billion — a record at the time. HCA then went public again in 2010 with a $4.6 billion initial public offering. Bain and KKR, both private equity firms, remain the two largest investors in HCA.

4. As of Dec. 31, 2013, HCA encompassed 165 hospitals and 115 surgery centers located in 20 states and London. It had a total of 42,896 licensed beds and 204,000 employees. Most of its hospitals are located in Florida (42), Texas (36), Tennessee (12) and Virginia (10). Although CHS has more hospitals in its portfolio than HCA, HCA still remains the largest for-profit hospital operator in terms of revenue. In fiscal year 2013, HCA posted $34.2 billion of revenue and $1.56 billion of net profit. About 38 percent of HCA's net patient revenue came from its outpatient business.

5. Although HCA competes with CHS, LifePoint and other for-profit hospital operators, its strategy is somewhat unique. CHS and LifePoint focus on the rural hospital base, while HCA owns more hospitals in larger, more populated urban areas. HCA facilities are lumped into 15 different divisions, which cover broad geographical areas. Some of the largest include the Continental Division, which includes Denver-based HealthONE, and HCA West Florida, which is one of HCA's largest divisions with 16 hospitals in the densely populated areas of St. Petersburg, Tampa, Sarasota and others.

6. A company as large as HCA is likely to encounter lawsuits, and some rather large ones have bubbled to the surface during the course of its history. One of the most noteworthy occurred in 2003, when the Department of Justice and HCA agreed to a $2 billion settlement, resolving allegations of Medicare and Medicaid fraud and physician kickbacks. HCA also reached multimillion-dollar settlements in 2000 and 2002 related to allegations of systematic overcharging of government payers, among other charges. Last year, The New York Times ran two investigative pieces that criticized the company's cardiac procedures and emergency department practices, claiming HCA has continued allegedly noncompliant practices raised in previous lawsuits. HCA has recently faced DOJ probes related to implantable cardiac defibrillators.

7. Milton Johnson serves as president and CEO of HCA. Mr. Johnson took over for Richard Bracken, who announced in 2013 that he was stepping down as CEO. However, Mr. Bracken still serves as HCA's chairman and will continue to do so through 2014. Mr. Johnson, a former Ernst & Young accountant, previously served as president and CFO, and he's been with HCA and its subsidiaries since 1982. William Rutherford serves as HCA's CFO, Samuel Hazen is HCA's president of operations and Jonathan Perlin, MD, acts as HCA's chief medical officer.

8. HCA is more than just hospitals and surgery centers; it also has several subsidiaries that branch out into different healthcare businesses, thus giving HCA more streams of revenue. One of the biggest includes Parallon, an outsourcing firm that provides revenue cycle functions, workforce management solutions and supply chain services to other hospitals and providers. Parallon is also closely aligned with HealthTrust, which focuses on healthcare cost management solutions. H2U is an HCA subsidiary that focuses on clinical and wellness services in low-cost settings.

9. One out of every 22 emergency room visits in the United States occurs at an HCA-affiliated hospital. In total, HCA manages 20 million patient encounters annually, and its hospitals delivered 212,000 babies in 2012. Other key HCA statistics, based on FY 2013 numbers include: 45 percent of HCA admissions were Medicare patients; 17 percent of admissions were Medicaid patients; 30 percent of admissions were privately insured patients; and 8 percent of admissions were uninsured patients. The operator also hosted a total of 881,900 outpatient surgeries and 508,800 inpatient surgeries. The average length of stay of 4.8 days.

10. HCA started hCare in 2006. hCare is a company-wide project to establish its electronic health record at all of its affiliated facilities — hospitals, surgery centers, everything. HCA is upgrading its existing system to the MEDITECH 6.0 platform.

Information was collected from HCA's website, SEC filings and other researched sources.

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