Memorial Hermann in a Hospital Swap

Negotiations to change the ownership of five hospitals and the acquisition of a sixth hospital building in the Houston and Southeast Texas area were recently announced by three major health care systems.

Officials of the Memorial Hermann Healthcare System, Columbia/HCA Healthcare Corporation, Gulf Coast Division, and Triad Hospitals, Inc., a newly organized spin-off company of Columbia/HCA, have signed letters of intent concerning two separate transactions that would affect ownership of hospitals in Beaumont, Katy, Pasadena, Fort Bend County and Houston, and the site of the Silsbee hospital which closed this week.

In one transaction, Columbia/HCA would acquire Memorial Hospital Pasadena (120 beds) that is in the same service area as its Bayshore Medical Center. Memorial Hermann would acquire Rosewood Medical Center (230 beds), at 9200 Westheimer; Fort Bend Medical Center (80 beds), on Highway 6 in Missouri City; and Katy Medical Center (100 beds), in far west Harris County, from Columbia/HCA.

In the second separate transaction, Memorial Hermann would acquire Triad Hospitals' Medical and Surgical Hospital of Beaumont and the assets of the former Silsbee hospital. Triad recently acquired 30 hospitals from Columbia/HCA.

Memorial Hermann and Columbia/HCA will immediately begin due diligence reviews of the hospitals to be acquired and will complete filings with the Federal Trade Commission for antitrust regulatory approval. It is anticipated that these transactions will be completed by July 1.

Dan S. Wilford, Memorial Hermann president, says there were three primary factors in reaching a decision that services at Memorial Pasadena had become redundant. Bayshore Medical Center has expanded its facilities and services, the Memorial system merged with the Hermann Hospital system, and the completion of Beltway 8 has allowed Memorial Hospital Southeast some overlap into the same service area.

Regarding Memorial Hermann's acquisition of the Katy, Fort Bend and Rosewood Medical Centers, Wilford says this presents an opportunity for Memorial Hermann to expand and become more efficient in its services in the southwest and west market areas of greater Houston.

(Wilford spoke at length about Memorial Hermann's plans in an interview with the TMC News, printed in the April 1 issue.

Regarding the sale of Beaumont Medical and Surgical Hospital and Silsbee Doctors Hospital, James D. Shelton, chairman and chief executive officer of Triad Hospitals, Inc., says "We are very pleased that two Triad facilities will be part of this transaction because it will allow for consolidation of healthcare services in the Beaumont area. This will be a very positive move for the people in both communities."

Wilford says that the acquisition of the Medical and Surgical Hospital of Beaumont will allow Memorial Hermann to provide more comprehensive services and expand following its recent consolidation with Baptist Hospitals of Beaumont and Orange.

- ANGELA McPIKE, KUYK LOGAN

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©2006 Texas Medical Center

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