HCA North Texas continued its expansion rush last week as a bankruptcy judge approved the $125.4 million purchase of Forest Park Medical Center’s shuttered Dallas flagship.
The deal, which closed on Friday, is the latest nine-digit expansion for the Irving-based Hospital Corporation of America subsidiary, coming weeks after spending $132 million on a 123-bed expansion to its own flagship, Medical City Dallas. HCA North Texas’ newest hospital is located a mere mile away—literally just on the other (east) side of U.S. 75—and will operate as a division of that hospital. The process to regain an operational license is underway now, but it’s too soon to know how the facility will be used.
Erol Akdamar, the CEO of HCA North Texas, said administrators are meeting with physicians for insight on the most appropriate use for the hospital. The 190,000 square foot facility features two separate towers, a medical office building, and a garage. It was largely used as a surgical specialty facility, prioritizing orthopedic and bariatric procedures on lucrative, privately insured patients. HCA’s purchase will allow all patients—even recipients of public plans like Medicare, Medicaid, and Tricare—to be seen there. Because Forest Park was a physician-owned hospital, it was barred by federal law from seeing those patients.
“I think there are a number of service line opportunities that probably would lend itself to that campus or at least part of it,” Akdamar said. “At this point, it’s too early to say given that we haven’t gotten with our physicians to get organized about what to do on that campus. There’s probably two to four service lines that might work there.”
Too soon to tell, sure, but if he had to say, Akdamar could see an addition of an ambulatory surgical center or its continuation as a specialty elective surgical hospital. It’ll just depend on how the strategic planning process goes. In the past three years, HCA has built a new hospital in the Alliance area of North Fort Worth. It’s acquired the CareNow chain of urgent care centers. It expanded to Frisco by purchasing the bankrupt Forest Park location there. And now it’s spent more than $250 million on expanding Medical City and buying the new hospital.
It’s the chain’s 13th hospital in the region; two of those are now within one mile of each other. Which begs the question: How much of this was a defensive maneuver to retain market share in the uber-competitive North Dallas market? (Keep in mind, Texas Health Presbyterian Hospital Dallas is just two exits south. The upstart Walnut Hill Medical Center is also in the area. There’s a Methodist hospital 10 miles north in Richardson, and Baylor Scott & White Medical Center Plano is only 8 miles away.)
“That was certainly a consideration, but I don’t think you would make this move purely defensively,” Akdamar says. “I think we have a strong asset in Medical City Dallas that continues to grow and this acquisition will allow us to grow faster and meet community needs and meet our physician needs, frankly, for additional capacity.”
HCA North Texas bought the hospital from principal lender Sabra Health Care REIT, whose $110 million loan sits as the catalyst for the bankruptcy. After the deal closed, the California-based real estate investment trust issued a release touting that it had been paid in full for the loan as well as a $15.4 million in interest payments that its previous managers had defaulted on.