Columbia / HCA Unveils Breakup Plan

Columbia/HCA Healthcare Corp. unveiled a restructuring proposal that would break up its hospital empire into five groups, with three of them slated for possible spinoff or sale. The Nashville-based company--under pressure from a massive federal Medicare fraud investigation for more than a year--said the breakup proposal, if pursued, would leave it with 232 hospitals, down from 340. Columbia also said it may divest 35 of its 148 free-standing surgery centers. Its 500-facility home-health-care business is already for sale. Wall Street’s reaction was tepid since the proposal confirmed earlier speculation, and analysts said the plan would probably not be implemented for months. Shares in Columbia fell 25 cents to close at $31.19 on the New York Stock Exchange. The company’s board approved a cost-cutting reorganization that halves the number of operating divisions from 36 to 18 as of Jan. 1, Columbia said. As proposed, Columbia’s core hospital business after the breakup would consist of 126 hospitals in its East Group and 106 hospitals in its West Group.