The Nashville hospital chain behind history's biggest buyout and a record fraud case
HCA started with one Nashville hospital in 1968 and within thirteen years ran 349. It has since gone private three times, including a roughly $33 billion buyout in 2006 that was then the largest ever, and paid over $2 billion after the longest health-care fraud investigation the US has seen.
Thomas Frist Sr., his son Thomas Frist Jr. and Jack Massey founded Hospital Corporation of America around Park View Hospital, which the elder Frist, a doctor, had opened in 1960. The idea was to pool many hospitals' resources. It listed on the New York Stock Exchange in 1969 with 11 hospitals and ended that year with 26. A buying spree followed, and by 1987 it operated 463 hospitals, owned or managed, before spinning off a 104-hospital company and taking itself private in a $5.1 billion management buyout in 1988.
Its most turbulent era began with a merger. In 1988 Rick Scott and Richard Rainwater had each put $125,000 into Columbia Hospital Corporation, buying two struggling El Paso hospitals. Columbia swallowed Galen Health Care in 1993 and merged with HCA in February 1994. Former employees had already filed suits over Medicare billing, and in 1997, as federal agencies investigated, the board pushed Scott out amid evidence of two sets of books. The company eventually pleaded guilty to 14 felonies, and the government collected over $2 billion in fines and penalties by 2003.
Frist Jr. returned to steady the firm. In November 2006 a group including KKR, Bain Capital and Merrill Lynch bought it for about $33 billion, eclipsing the 1989 RJR Nabisco deal. When it relisted in March 2011, selling 126.2 million shares at $30, it set a record for a private-equity backed US flotation. The name HCA Healthcare arrived in May 2017.
Today it runs 186 hospitals and more than 2,400 other sites in 20 states and Britain, where its London hospitals serve about half the capital's private patients. Florida and Texas hold large clusters. HCA is also the largest US sponsor of graduate medical training, with 56 teaching hospitals. Recent controversies include staff complaints about protective equipment during COVID-19 and a 2023 lawsuit from North Carolina's attorney general over its Mission Health purchase, which HCA denies.
Source: HCA Healthcare
