Case study: "Hospital Corporation of America" by Kester, W. Carl

TABLE OF CONTENTS

I.Introduction1

II.Key Issues2

III.Recommendations6

IV.References7

I.Introduction

Hospital Corporation of America (HCA) is propriety, hospital concern company founded in Nashville, Tennessee in 1968 with only one, 150-bed hospital and then grew to become the nations largest hospital management company. As of 1981, HCA owned or managed 349 hospitals in the united States and overseas.

During the 1970s, HCA achieved its growth by acquisition of existing hospitals and construction of rising ones. During the period of 1968-1981, it constructed 70 new and replacement facilities and acquired or lowtake the remaining 279 of its hospital. Each year HCA evaluated many potential acquisitions and areas for construction, with the criteria for natural selection including the maneuver communitys need for health care services, the quality of the target hospitals medical staff and personnel, the population growth pattern in the area served, the facilities suitability for future refinement, and the hospitals overall financial position.

Although HCAs procedure generated substantial cash for reinvestment, still it needed external financing for its ambitious construction and acquisition program. In early pointedness of development, external financing were mainly from revolving credits to finance hospitals under construction, industrial revenue bonds and privately placed, long-term mortgage loans fro insurance companies funded completed hospitals and acquisitions.



Other sources were difficult to tap at first, repayable to the newness of propriety hospital industry and the small size and shortsighted track record of HCA, and the poor image of hospital management companies at that time. However, HCA could finally manage it as the industry matured, and HCAs steadfast performance became recognized.

II.Key Issues

Since its establishment, HCAs growth has been contributed by acquiring hospitals, constructing new ones, expansion of services, and the signing of new management contracts. Similarly to any another(prenominal) businesses that new...

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