Possible Sale Includes Northwest

Despite strong performance from its Northwest Arkansas business units, publicly traded Quorum Health Group Inc. is considering selling out.

A combination of deflated profits and a seven-year-old federal fraud case have put pressure on the company, which owns Northwest Health System. The system includes Springdale’s 225-bed Northwest Medical Center and Bentonville’s 63-bed Bates Medical Center.

Quorum announced on Aug. 11 that it is “actively exploring various strategic alternatives including the possible merger, sale or recapitalization of the company.” Prospective buyers include Triad Hospitals Inc., Universal Services Inc. and Province Health Care Co.

A quarterly report that was scheduled to be released Aug. 17 was expected to show an earnings drop-off of as much as 11 cents per share.

But profits have been good locally. For the year ended June 20, 1998, Northwest Medical Center recorded $5.7 million in net income and had estimated revenues of $141.6 million. Along with Bates, it employs about 1,590 full- and part-time workers.

The 1999 figures were not available, but Northwest Health president and CEO Bill Bradley was recently reported to have said the system showed a 9 percent growth in admissions and revenue over the last year.

Tami Hutchison, Northwest’s senior vice-president of strategic business development, said the company is “pleased with the progress [it has] made since the beginning of the year.”

Allegations against Quorum include that it overcharged federal health-care programs more than $70 million by claiming higher reimbursements than it was entitled. Shea Davis, a spokeswoman for Quorum, said the company “does not believe it has done anything systematically incorrect all along.”

Davis said it’s “business as usual” at Quorum and that no sale could take place until the court case is settled.