FOOL CONFERENCE CALL SYNOPSIS*
By Dale Wettlaufer (MF Raleigh)

COLUMBIA/HCA HEALTHCARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: COL)") else Response.Write("(NYSE: COL)") end if %>
One Park Plaza
Nashville, TN 37203
615-327-9551h
http://www.columbia.net

ALEXANDRIA, Va., Nov. 8, 1996/FOOLWIRE/-- Columbia/HCA Healthcare Corporation announced on November 6 operating results for the third quarter and nine months ended September 30, 1996. For the quarter ended September 30, 1996, revenues totaled $4.9 billion, up 12% from last year's $4.4 billion. Operating income for the quarter totaled $979 million, up 15% from last year's $849 million. Earnings per share rose 15%, from $0.40 in the third quarter of 1995 (excluding extraordinary charges for refinancing of high cost debt) to $0.46 in the third quarter of 1996. Revenues totaled $14.8 billion for the nine months ended September 30, 1996, up 13% from last year's $13.1 billion. Operating income for the first nine months of 1996 totaled $3.2 billion, up 15% from last year's $2.7 billion. Earnings per share rose 15%, from $1.40 last year (excluding merger and facility consolidation costs and extraordinary charges) to $1.61 in 1996. . All historical information has been restated to reflect a 3-for-2 stock split which was distributed October 15, 1996.

COLUMBIA HOSPITALS RECOGNIZED NATIONALLY FOR QUALITY

Chairman and CEO Richard L Scott said that he is "particularly pleased that Columbia is increasingly being recognized for its high quality and compassionate care as evidenced by the 38 Columbia hospitals which this year have received Accreditation with Commendation from the Joint Commission on Accreditation of Health Care Organizations - - bringing Columbia's total commendations to the nation's leading number of 108 hospitals. Thirty-one percent of Columbia's hospitals have received JCAHO Commendation, while less than five percent of all hospitals nationally have received commendation."

INPATIENT AND OUTPATIENT UTILIZATION UP 11% BASED ON ADJUSTED ADMISSIONS

On a consolidated basis, Columbia's adjusted admissions (reflects both inpatient and outpatient activity) rose 11% in the third quarter of 1996.

INPATIENT ADMISSIONS ROSE 7% IN THE THIRD QUARTER OF 1996.

Same-facility net revenues grew 11% in the third quarter, based upon same-hospital adjusted admissions growth of 8% and same-hospital inpatient admissions growth of 4%. Surgery cases at the Company's hospitals and ambulatory surgery centers increased 7% on a same-facility basis in the third quarter of 1996. Also, the Company's homecare agencies provided approximately 3.3 million homecare visits during the third quarter of 1996. As a result of the Company's growth in outpatient surgery, homecare services and various other ancillary services, outpatient revenues increased from 37.1% of total patient revenues in the third quarter of 1995, to 39.4% in 1996.

MOODY'S RAISES RATINGS ON COLUMBIA; BALANCE SHEET STRENGTHENED

The Company improved its ratio of debt to capitalization to 43.9% at September 30, 1996, versus 48.5% at December 31, 1995. Columbia's assets totaled $20.7 billion at September 30, 1996, up from $18.2 billion a year ago. On August 16, 1996, Moody's Investor Service raised Columbia's debentures, notes, and medium-term notes to "A2" from "A3" and raised the senior subordinated notes to "Baa1" from "Baa2". Columbia's commercial paper rating was raised to "Prime-1" from "Prime-2". Columbia's debt is also rated investment grade by Standard and Poor's.

COLUMBIA NETWORKS EXPANDED AND SERVICES BROADENED

Since the beginning of 1996, Columbia has expanded its networks through the acquisitions and joint ventures of 28 hospitals with annual revenues of approximately $1.3 billion. Letters of intent have been signed with an additional 14 hospitals with annual revenues of approximately $1.2 billion.

Network services have been broadened during the nine months of 1996 by additions of 30 skilled nursing units, 12 psychiatric units, 7 rehab units, and 12 comprehensive outpatient rehab units. In early November, Columbia acquired Atlanta-based Central Health Services, Inc., which provides more than 2.8 million homecare visits annually to more than 24,000 patients in Georgia, North Florida, and Tennessee. Columbia now has more than 560 homecare locations.

68,000 CALLS DIRECTED TO 1-800-COLUMBIA IN THIRD QUARTER

On July 1, Columbia opened a national physician referral and consumer telemarketing service at a state-of-the-art national call center in Fort Worth, Texas. During the third quarter of 1996, more than 68,000 calls were received by 1-800-COLUMBIA. The service, which is available to patients and consumers 24 hours a day, seven days a week, can link callers directly to a physician's office. The Columbia Call Center plans to continue to add new services which make healthcare information more accessible, including an automated health information library.

COLUMBIA EXTENDS ONLINE HEALTHCARE SERVICES

Columbia has initiated a new service called Health Answers A-Z. This service is an encyclopedia of the latest health innovations and can be accessed on America Online. The Columbia Internet Site has also developed a Virtual Hospital with the following wings: cancer, admitting, obstetrics, emergency, cardiology and surgery. Columbia's Intranet has received a BOTI (Best on the Internet) award for Best Informational Intranet and now has over 1,100 users.

SUMMARY OF KEY INDICATORS

-- EPS and EBITDA (earnings before interest, taxes, depreciation and amortization) up15%

-- Revenues up 12%

-- Revenues up 19% including non-consolidated equity joint-ventures

-- Same facility net revenues up 11%

-- Same-facility admissions up 4%

-- Outpatient services now 39% of revenues

-- Same-facility EBITDA margin up 170 basis points (1 basis point = 1/100th of a percentage point)

-- 28 acquisitions/join-ventures completed year-to-date; 14 more letter of intent signed

-- Debt-to-capital down to 43.9%

-- New contracts drive managed care admissions to 33% of total

-- 108 Columbia hospitals now with JCAHO quality commendation; 31% of Columbia hospitals vs. less than 5% nationally

QUESTION AND ANSWER SESSION

When the company manages a hospital, it has a substantial amount of oversight. In acquisitions, the company has the opportunity during performance of due diligence to address any shortcomings and address those before closing a deal.

The company's home healthcare units currently receive 35% of referrals from its hospitals, so there is upside as that changes.

There is plenty of opportunity in New York State with deregulation taking place there. The company is progressing with its facilities in New England, as well.

The company is constantly assessing opportunities to build shareholder value versus its capital needs and acquisition opportunities -- at the present time, there are ample acquisition possibilities, so there is no plan to expand its share buyback program. The company is also looking at new construction projects. If the company can build a facility for 4 times or less pro-forma operating numbers, it makes more sense to build than to acquire something for 7-9 times EBITDA. In addition, the company can ramp up facilities rapidly and build them to specifications matching the specific needs of the market.

The company feels comfortable with margin growth in its older markets such as Florida and Texas as same-facility revenues grow and as the company gains leverage from low marginal costs.

The company has sales personnel dedicated to individual HMO companies such as Aetna/US Healthcare and United so Columbia/HCA and those firms can figure out how to work together on a national basis. The company has a good ongoing dialogue with national and regional HMO companies, so the recent Ornda/Tenet merger doesn't put them in a new position of working with large healthcare insurance companies with clout.

The company continues to work with physicians to develop products and services to help them manage their practices. Both the company and physicians share financial risks in dealing with managed care companies. The company continues to work with physicians on keeping patient volumes up, managing legislative issues, and in dealing with financial issues. Customers, both physicians and patients, have rewarded the company's efforts with increasing same-facility revenues. Of the 68,000 calls to 1-800-COLUMBIA in the third quarter, 58% were for physician referral. This call volume and level of customer trust means a lot to the physicians with which Columbia partners or may partner.

California should continue to grow and will be the largest division in the company after the completion of the Sharpe transaction.

Medicare was 40% of revenues; Medicaid, 13%; managed care, 33%; self-pay, 4%; and commercial products, 10%.

The company believes that hospital consolidation is a positive move for the healthcare market. Columbia has consolidated 5 hospitals year-to-date.

The easiest areas to look at for cost reduction is in supplies, and the company thinks that it's still a lot of room to do so. However, ideas for improved care on lower costs, in areas such as information sharing, are always presenting themselves.

The company's growth rate goal is 15% per year -- the company feels very good about its prospects for doing so. Investments in branding and information systems are typical of the type of expenditures which the company believes will generate returns on capital meeting its goals.

PPS as proposed would probably have little impact on the company's margins and would create opportunities in that the company could go after fixed rate business and in that the company would have a 2-3 year transition window to prepare for the changes.

Outpatient same-store-revenues were 40% of the total in the estimate of the CFO.

The company spent a lot of time in labor and supplies in the last year and those expenses are well in-hand.

Homecare operating margin is 15%.

* A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements.