Healthcare Industry Keeps Eye on HCA Deal

HCA’s decision to sell three private equity firms and become a private company has many in the healthcare industry as giddy as a school kid.

“It’s fun to watch,” but it’s also a bellwether, says John Deane, CEO of Southwind Health Partners, a physician practice management and consulting firm.

It?s fun for Deane because bad times for hospitals means potential business for Deane?s operation. Bad debt, flat admissions and rising costs are likely to cut deeper into hospital profits, but Deane said those trends actually could help his company, which primarily works with hospitals to hire or contract with doctors. When times are tough, he said, hospitals are more likely to call on him to help strike deals with doctors to control costs or keep physicians on staff.

Others are watching the sale because of what it might say about the health-care industry.

“For many of us who’ve been around this community a long time, you’re watching what they’re doing as a leading indicator,” Dan Slipkovich, a former HCA executive who co-founded Franklin-based Capella Healthcare Inc. 18 months ago, told The Tennessean

Capella wants to grow by acquiring weak hospitals and turning them around, and HCA’s decision to sell to a group of investors who’d take the company private ? allowing them to operate and possibly restructure without worrying about Wall Street’s reaction or stock price declines ? suggests there could be more under-performing hospitals on the market at good prices, Slipkovich said.

“If everything’s positive, there’s not going to be that many acquisition opportunities for us,” he said. “When people are having difficulty ? that creates opportunities for groups like ours to acquire, partner, whatever it may be with the community hospitals.”