Texas doctors duel with Columbia/HCA

Business & Health, June, 1997

A lawsuit filed by Texas surgeons alleges that Columbia/HCA busted up their plans to build a surgical center and thereby violated antitrust statutes. The surgeons charge that primary-care doctors linked to two Columbia facilities in Clear Lake, Texas, threatened to withhold crucial business if plans for the competing center proceeded.

The fracas erupted after Columbia gained a dominant position in the Houston-area health care market by acquiring Clear Lake Regional Hospital in 1993 and Bay Area Surgicare, a nearby outpatient surgery center, in 1994. Local surgeons were at the mercy of primary care doctors who had been wooed by Columbia into lucrative partnerships, as they formed hospital networks to negotiate contracts with managed care insurers.

In 1994, 55 surgeons proposed that Columbia help them build a new outpatient surgery center. The hospital chain rejected the offer because the physicians wanted majority ownership, which it had granted to surgeons elsewhere in the Houston area. The surgeons then inked a deal with smaller, Atlanta-based Surgical Health. Columbia responded by accelerating plans to rebuild its own surgicenter--the new facility opened in March 1997--and offering local surgeons partnerships in that enterprise.

In the antitrust suit scheduled for trial this summer, the competing surgeons charge that this was a deliberate--and successful--attempt to torpedo their deal with Surgical Health. Columbia counters that the venture collapsed of its own weight and, in court documents, says it made no threats. Changes in referral patterns, says the hospital giant, simply result from the health plans directing members to its facilities. Columbia has also filed a counterclaim, alleging the surgeons tried to interfere with its contracts in the Clear Lake area.

A front page story in The Wall Street Journal reports Columbia playing hardball over exclusivity elsewhere in Texas. The article details encounters between Dr. Michael Rogers, head of Fort Worth's largest radiology group, and the administrator at Columbia Plaza Medical Center. Rogers says he was told that he'd have to leave his group, which serves several area hospitals, if he wanted to keep practicing at Columbia Plaza. Columbia rejected a compromise that would set up a separate limited liability company of doctors within the radiology group who worked at Columbia Plaza. The situation is on hold for the moment, with Rogers stepping down as chairman of the radiology group while continuing to practice at Columbia Plaza. The Journal reports, however, that the hospital has successfully applied similar pressure to pathologists, anesthesiologists and ER physicians.