Columbia/HCA: Health Care on Overdrive. - book reviews

Healthcare Financial Management, Feb, 1998 by Kevin Oberholtzer

Columbia/HCA: Healthcare on Overdrive describes how the

unbridled growth of a for-profit healthcare organization had a profound

effect on the healthcare industry. At the center of Overdrive is Richard

Scott, Columbia/HCA's aggressive former chairman and CEO, who needed only

10 years to build a modest for-profit healthcare organization into one of

the most powerful and controversial businesses in the United States.

Scott entered the healthcare business in 1987, at a time when 50 percent of

hospitals were unprofitable. After mailing 1,000 letters in search of a

seller, Scott helped a physician group purchase two poorly performing

facilities in El Paso, Texas, to form Columbia Hospital Corporation.

Building on the cornerstones of physician ownership, consolidation, and

local management of integrated networks, Scott was able to grow Columbia

rapidly. This growth accelerated dramatically when he began to develop

relationships with Wall Street analysts. By 1997, after a series of mergers,

Scott was running the seventh largest employer in the nation, with $20

billion in annual revenues.

Overdrive addresses the negative factors that accompanied the growth of

Columbia/HCA, including public perception of the organization as a big

bully, embarrassing communications problems, and resistance to feedback from

local management. The authors also examine the government's unannounced

investigation of Columbia/HCA facilities in March and July of 1997 and, in

the process, provide a textbook example of how not to handle a crisis. This

part of the book is particularly instructive on the need for direct, open

dealings with board members and the media.

The book concludes with an analysis of Columbia/HCA's mistakes and

successes, and closes with a warning. In a time of rapid change in the

healthcare industry, healthcare leaders can ill afford to be strategically

conservative simply to avoid becoming the object of a Federal investigation.

The book lacks the riveting behind-the-scenes treatment found in Barbarians

at the Gate by Brian Burroughs and John Helyar, and it sometimes provides

more information about other for-profit firms than readers might want to

know. But it is worth reading, if only to learn from the mistakes made by

Columbia/HCA and its for-profit forebears.

Reviewed by Kevin Oberholtzer, manager, provider payment, Capital Blue

Cross, Harrisburg, Pennsylvania, and a member of HFMA's Appalachian Chapter

of Central Pennsylvania.