In early 1997 the Directors voted to let the nation's largest, for-profit hospital chain, Columbia/HCA Healthcare Corp., take it over. After six months of exclusive talks to iron out details, the deal was expected to close in November 1997.
The terms of the deal were: Columbia will pay Fallbrook Hospital $4.4 million for a 30-year lease, which will be used to pay off most of its debt. Columbia will loan Fallbrook Hospital up to an additional $1.5 million to pay off the rest of the debt, and the property tax revenues will be used to pay off that loan.
The president of Columbia's Pacific Division, Richard Bracken, lives in Fallbrook.
Two directors of Fallbrook Hospital resigned after the vote, and a number of citizen groups are violently opposed to the proposal.
Source: SDUT 4/19/97, A1, A17.
The Columbia deal was still not consummated as of 2/98, primarily due to the many troubles that Columbia has found itself in due to Medicare billing fraud and the resultant restructuring Columbia is undergoing.
The NCT on 2/7/98, A8, stated that Columbia is paying only $3.6 million for the lease, instead of the $4.4 million reported by the SDUT.
Finally, in March 1998, it became fully apparent to all that Columbia was not going to consummate the deal, but was either not honorable enough to say so, or so disorganized that it could not do so. Fallbrook Hospital directors tried repeatedly to contact Columbia, getting no reply. At that point, Fallbrook Hospital cancelled the deal.
In retrospect, it was not surprising that Columbia, which was fighting for its life with Congress looking into its illegal practices, had its attention diverted from the deal with the Fallbrook Hospital. The Fallbrook Hospital just had bad timing - the deal undoubtedly would have gone through if it could have been consummated before Columbia's problems came to light, and there would never have been a deal if the problems had come to light earlier.
Go to Fallbrook Hospital History
Copyright © 1998-2000 by Tom Chester.
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Last update: 28 December 2000.