Triad is paying $44 million to Hillcrest Healthcare System for the remaining stake in the Tulsa hospial, which had opened in May 1999 under Triad's management. The year-start news comes on the heels of the sell-off of Sherman's Community Medical Center and a the gloom-and-doom report for San Diego County's Mission Bay Hospital, which has been closed since Nov. 30, 2000.
The 116-bed acute-care hospital, Tulsa's newest facility, will be adding 32 more beds, ambulatory surgery center, abutting medical office building and extra operating rooms. In addition, Triad gets an option to buy 26 abutting acres from Hillcrest for future expansion.
This first quarter will bring an accounting change with the new deal. SouthCrest's financial performance will be reported on a consolidated basis as opposed to an equity basis although the new pact guarantees, for a limited time period, that Hillcrest can repurchase 49% interest in SouthCrest at fair market value. If Hillcrest exercises its option, Triad will remain as hospital manager and continue the financial consolidation reporting.
"Although still in the development phase, SouthCrest has progressed beyond the higher risk stage associated with the initial launch of a new hospital," says James D. Shelton, Triad chairman and CEO. "Patient admissions continue to grow, and we expect the hospital to be a major provider in the market for years to come."
Triad has netted $16 million from the sale of Sherman's Community Medical Center and an ambulatory surgery center. Meanwhile in San Diego, the company has decided to abandon a $150 hospital replacement project.
Hospital officials say Triad's fourth quarter will still produce 6-cents to 10-cents per share earnings when final tabulations are complete. Despite the changes, the corporation remains poised to buy Quorum Health Group Inc. and is making plans to dispose of Quorum assets when the final pact is inked. The Quorum deal will take Triad's portfolio to 51 hospitals and 13 ambulatory centers, with one more under construction.
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