
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, May 25, 1995                   TAG: 9505250064
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: MIKE HUDSON STAFF WRITER
DATELINE:                                 LENGTH: Medium

ALLEGHANY HOSPITAL BOUGHT

Columbia/HCA Healthcare Corp., the nation's largest health care company, said Wednesday it was adding to its Western Virginia network by signing a deal to buy Alleghany Regional Hospital in Low Moor.

The Nashville, Tenn.-based company expects to complete the deal within 45 days, pending approval by government regulators. The 204-bed hospital will change from nonprofit to for-profit status.

Terms of the sale were not reported Wednesday, but the parties said the proceeds will be used to pay off the hospital's existing debt, the amount of which was not disclosed, and to create a local charitable foundation with assets of more than $30 million.

George Kostel, an Alleghany hospital board member, said the foundation - which will be run by the former board of the hospital - will use its money to benefit the Alleghany Highlands. Some of its giving likely will go toward providing health care services, he said, but it is unclear exactly what other charities and projects would benefit from the foundation.

The board signed a contract with Columbia/HCA late Tuesday. The hospital's physician practice subsidiary, Alleghany Highlands Healthcare Services, also is included in the sale.

Columbia/HCA officials will bring the hospital into its health network in the region that also includes Lewis-Gale Hospital and Lewis-Gale Psychiatric Center, both in Salem; Montgomery Regional Hospital, Blacksburg; Pulaski Community Hospital, Pulaski; and Greenbrier Valley Medical Center in Lewisburg, W.Va.

The Alleghany hospital employs the equivalent of 400 to 450 full-time workers, and hospital officials said they expect Columbia/HCA will ask all of them to stay in their current jobs.

Wick Lyne, president of the company's Virginia division, said the company will work closely with physicians to create "a fully integrated delivery system" for the Alleghany Highlands.

The agreement is part of Columbia/HCA's continuing growth strategy - and the climax of a two-year study by Alleghany Regional's board about its future in a changing environment for health care. The board decided in December to propose selling to Columbia/HCA, and hired Josh Nemzoff, a Louisville-based consultant, to negotiate the deal.

Nemzoff said Wednesday that Alleghany Regional was "doing extremely well financially" but the board decided it needed to join a network to compete with other medical care providers.

Nemzoff said the board had to select from two choices - selling to Columbia/HCA or merging into the nonprofit Carilion Health System, a Roanoke-based hospital company.

by CNB