and clinics. This technologically advanced development labeled Columbia as one of the three most effective users of information technology in the United States. The company implemented a $200 million information system in 1995. The development allows the company to manage all locations, which means that each location does not have to worry about managing a MIS system. The system offers support system to the entire operations of Columbia/HCA. Columbia established a good relationship with referral physicians, by creating sales for thesephysicians through outpatient services. The company referred patients directly to these physicians. This process allowed doctors to be part owners, so they have a say in company decisions.Weaknesses:The company image of Columbia/HCA was in jeopardy, due to fraud investigations being conducted on the company, its board of directors, and key current and former executives. Federal authorities triggered a chain of reactions throughout Columbia/HCA, when they served search warrants on operations at Columbias El Paso, Texas facility on March 19, 1997. Further searches were conducted on various Columbia-affiliated operations on July 16, 1997. At the time, the investigation appeared to be focusing on laboratory billing and home health care operations. Columbia/HCA were later alleged with false characterization of interest payments on certain debt, resulting in overpayments to the hospitals by Medicare and CHAMPUS. The company was also charged with mismanagement that led to stock losses for the states public employees pension fund. It was claimed that Columbia defrauded the government for years by intentionally inflating the cost of treating Medicare patients by up-coding the severity of medical procedures billed to Medicare. Due to fraud allegations, Columbia's stock price sank to 25 in October 1997, from 44 just eight months previous that same year. During this time, patient admissions fell by an es...
