Healthcare Industry Shakeup: Major Transactions and Appointments

Strategic Insights -

Healthcare conglomerate Columbia/HCA is selling 22 hospitals in four states to a nonprofit consortium for $1.2 billion, marking the largest purchase of hospitals by not-for-profit health care organizations. Meanwhile, Pan Am Corp. and its lender, NationsBank, reached a repayment agreement, and President Clinton has tentatively chosen Dr. Jane Henney to become the first female chief of the Food and Drug Administration.

Key Takeaways:

  • Columbia/HCA is selling 22 hospitals, one ambulatory surgery center, and office buildings to a nonprofit consortium for $1.2 billion, as part of efforts to downsize and concentrate on improving patient care.
  • The sale involves hospitals in Tennessee, North Carolina, Kentucky, and Alabama, all part of Columbia's 45-hospital Atlantic Group.
  • Salomon Smith Barney helped broker the deal, with David Cyganowski and Fred Hessler calling it the largest purchase ever of hospitals by not-for-profit health care organizations.
  • Pan Am Corp. reached a repayment agreement with its lender, NationsBank, on the eve of its bankruptcy court date, with NationsBank accepting $20.5 million cash in lieu of its $26.5 million claim.
  • Guilford Transportation Industries upped its offer to Pan Am for the airlines' remnants by $1 million to $29.5 million, and Greenwich, Conn.-based Wexford Management pulled out of the bidding.
  • President Clinton has tentatively chosen Dr. Jane Henney, a New Mexico cancer specialist, to become the first female chief of the Food and Drug Administration, pending background checks.
  • Dr. Henney has hands-on experience in running the agency, having served as a close deputy to former FDA Commissioner David Kessler from 1992 to 1994.

Statistics:

  • 22 hospitals being sold by Columbia/HCA in four states.
  • $20.5 million cash received by NationsBank from Pan Am Corp. under the repayment agreement.
  • $29.5 million Guilford Transportation Industries is offering for Pan Am's remnants.
  • 25% of the national economy regulated by the Food and Drug Administration.
  • $1.2 billion value of the hospital sale deal.

Sources:

  • "Columbia/HCA Sells 22 Hospitals" article, no date provided.
  • "Pan Am, NationsBank Cut Deal on Eve of Bankruptcy Court Date" article, no date provided.
  • unnamed administration officials, no date provided.
  • unattributed Salomon Smith Barney quote, no date provided.