FOOL CONFERENCE CALL SYNOPSIS*
By Debora Tidwell (MF Debit)

Columbia/HCA Healthcare Corp.
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One Park Plaza
Nashville, TN 37203
(615) 327-9551
http://www.columbia.net/

UNION CITY, CA (April 1, 1997)/FOOLWIRE/ --- Columbia/HCA held a conference call Monday morning. Although they were not in a position to answer questions concerning pending litigation they had a few comments to make concerning the recent events in El Paso, Texas and subsequent developments. They were prepared to respond to questions not involving litigation matters.

Over the past two weeks, Columbia has been the focus of intense media scrutiny and speculation. Their objectives with the conference call were: 1) to try to sort fact from speculation, 2) to outline how Columbia plans to address these issues head-on, and 3) to assure people that Columbia intends to do the right thing. It has been and continues to be Columbia's expectations that their employees abide by the law. If they have made mistakes it is their goal to find out what they are and work to correct them.

On Wednesday, Marcy 19th, Columbia's El Paso, Texas operations, including their El Paso Division office, two hospitals, and various other local Columbia healthcare facilities, along with a number of physicians located in El Paso were served federal search warrants for a broad range of records and documents. Columbia's facilities and employees in El Paso cooperated with federal agents as they gathered documents over a two-day period. The gathering of information was completed Thursday, March 20th. While certain news media continue to speculate on the possible allegations in El Paso, often referring to unnamed sources, the affidavits underlying the search warrants remain sealed. There is no timeline as far as when they will be unsealed. Columbia is working with the US Attorney's office in El Paso in an attempt to determine the specific allegations but they will not speculate how soon that might occur. While they are working primarily with the US Attorney's office in El Paso, they now understand that the FBI, HHS, ACIS which oversees the CHAMPUS program, and the IRS each have varying degrees of involvement in the El Paso investigation. They have no official confirmation that the El Paso investigation includes healthcare facilities in other markets.

El Paso is an important market for them and they take this investigation seriously. However, they think it is also important to put their El Paso operations in perspective. In 1996 their El Paso division generated approximately $275 million in revenues. That is less than 1.5% of their consolidated results and the market's profitability was slightly below the corporate average. One final point in El Paso relates to the news articles that have appeared on recent litigation involving Columbia and two individual physicians in El Paso. Since they currently plan to appeal this case, they cannot comment on this pending litigation. However, they believe that this case involves a fairly unique set of facts. They will be presenting their side on appeal. They don't think it is appropriate to reach any company-wide conclusions regarding physician relations based on the limited presentation of this specific case in the media.

Next the company discussed some of the commentary that has been published regarding a purported broad review of Columbia by HCFA (Health Care Finance Administration). First, HCFA has not informed them of any such review of Columbia. They take very seriously, however, the statements in the media attributed to the current head of HCFA. They will request a meeting with him to discuss any concerns HCFA might have with Columbia's provision of health care services including the two specific issues reportedly commented on according to the media: 1) Medicare coding, 2) referrals by physicians with ownership interest in a local hospital or health care system to home care or skilled nursing units which are part of a hospital.

With regard to Medicare coding, simply speaking coding is a process of determining which of more than 470 designated diagnoses for which a Medicare patient is being treated. Accordingly, to ensure accurate coding, Columbia has invested significantly in coding systems and technology developed by a well-known, highly regarded technology company. Columbia also invests each year in the education and training of those employees responsible for Medicare coding. They are very concerned about implications in a New York Times article concerning their Medicare coding practices. Columbia was not provided an opportunity to review their data and were given only a limited description of their methodology. Columbia cannot specifically address their findings or interpretation.

The company was asked how they would be able to use the information from their information systems for outcomes research specifically related to costs. They answered that last year they invested about $200 million in information technology and will put another $250 million. The whole focus is to get realtime information to everyone involved. As part of this process they are standardizing information so they can share information across markets for the benefit of the care givers but also for the benefit of looking at ways they can find best practices. Also, by doing that, they can compare facilities on things such as complication rates a lot easier because everything is much more standardized. They have historically been very measurement oriented in most areas and outcomes is one of those areas. What they found is that as they measure and share that information across their markets, which IS (information systems) is the key to doing that, they have seen continued improvement. Today, the industry is very price driven. The reason it is price driven is because people are not able to differentiate themselves. Columbia believes that their investment in IS is one of their big differentiators in that if you come to a Columbia facility your medical records are going to be online immediately and your physician and nurses can track everything using shared data.

With regard to physician ownership, Columbia believes that the structure of their physician ownership is in compliance with current law. If the law is changed, they will change their structure accordingly. More broadly on the issue of physician ownership, while approximately 4% of the physicians affiliated with Columbia hospitals have an ownership interest in Columbia hospitals, they believe physicians should be allowed to invest in health care facilities because, similar to employee ownership, such ownership can result in a higher quality and better service for their patients.

They were asked if their physicians have ownership just in the hospitals or of the hospitals, home care, and other ancillary services as well. They responded that every transaction is a little bit different and depends on what's in the market. There is no set structure they use across the country. In some of them, they would have an interest in a hospital where home health and/or a skilled nursing unit is part of the hospital.

Columbia intends to do the right thing. They have hired an outside legal counsel and an outside communications management firm, both with extensive experience in matters of this type. They will continue to cooperate with the authorities conducting the El Paso investigation. They hope to meet with HCFA in the near future to determine any concerns they might have. It has been and will continue to be Columbia's expectations that their employees abide by the law. If they have made mistakes, it is their goal to find out what they are and to work to correct them.

The company was asked if they have seen any impact from the investigations on their pipeline of acquisitions and what they are telling employees and other people closely tied to the company. They responded that it is too early to tell. They are making sure that everyone they are talking to gets the same information they are putting out today, but it is too early to tell. They sent out a letter to their facilities Sunday night that can be used with their employees, physicians, board members, senior friends members, etc. They have done an email to all employees in the national office. With regard to payors, they will encourage any who have concerns to give them a call.

Columbia was asked if they have seen any fallout from doctor referrals in any other markets and have any of their employees been questioned in other markets. The company responded that this has just happened, but they haven't seen anything to-date, but it just happened. They are very hopeful that they won't see it. They believe they have been successful because they have a big focus on results outcomes, patient satisfaction, costs, etc. They don't anticipate any fallout, but they will see what happens. They can't comment on whether employees in other markets have been questioned.

The company was asked about the Value Health transaction. The company responded that they don't presently anticipate any changes to the Value Health deal. It is still subject to shareholder approval. They will continue to go through the process and hope to close the transaction sometime in the second quarter. Right now they don't anticipate changing the timeline.

* 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.