Background on Company
Columbia Healthcare was formed in July 1988 by Richard Scott, a lawyer and Richard Rainwater, a financer. The for-profit healthcare corporation began with 120 physicians and two hospitals in El Paso, Texas. In May of 1990, Columbia Healthcare purchases a Lab Processing company and also became a public company listed on the stock exchange. The corporation continued to grow rapidly, in late 1993 they merged with Galen Healthcare, bringing them from two hospitals to 99. Then in early 1994 Columbia merged with Hospital Corporation of America to become Columbia/HCA. Hospital Corporation of America was founded in 1968 and went through remarkable growth themselves through the 1970’s and 80’s. At the time of the merger Hospital Corporation of America had 255 hospitals that they owned and 208 that they managed. Together Columbia and Hospital Corporation of America were a $10 Billion company. The growth didn’t stop there, Columbia/HCA acquired HealthTrust for $5.6 Billion, and continued to purchase other hospitals, a total of 33 for profit transactions occurred in
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The New England Journal of Medicine published two articles attacking Columiba/HCA’s business practices and its corporate philosophy. 60 Minutes did a hard hitting exposure of Columbia/HCA’s business and referral practices. Attorney Generals across the country had started looking at the multitude of purchases and acquisitions that Columbia/HCA had gone through. As people were beginning to question the for-profit chain activity, Columbia/HCA turned their attention to managed care groups. They bought a managed care group in the United Kingdom and made a plan to purchase the not for profit HMO’s Blue Cross and Blue Shield. They announced plans to invest $1Billion to enter and revitalize the Australian health care