8-K

 
                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C.  20549

                      ----------------------------------


                                   FORM 8-K
                                CURRENT REPORT


                        Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934


Date of Report                                                    August 6, 1997
(Date of Earliest Event Reported)

                      COLUMBIA/HCA HEALTHCARE CORPORATION
            (Exact name of Registrant as specified in its Charter)


                                   DELAWARE
                           (State of Incorporation)


 001-11239                                                       75-2497104
(Commission                                                   (I.R.S. Employer
File Number)                                                 Identification No.)



One Park Plaza, Nashville, Tennessee                                 37203
(Address of principal executive offices)                          (Zip Code)

                                (615) 327-9551
             (Registrant's telephone number, including area code)



 
ITEM 5. OTHER EVENTS

        On August 6, 1997, Columbia/HCA Healthcare Corporation announced the 
completion of its merger with Avon, Connecticut-based Value Health, Inc.  The 
transaction was finalized when Columbia purchased the outstanding shares of 
Value Health common stock for $20.50 per share.

        On August 7, 1997, Columbia/HCA Healthcare Corporation's Chairman and
Chief Executive Officer, Thomas F. Frist, Jr., M.D., announced certain planned 
changes in the Company's business approach.


ITEM 7. EXHIBIT

        Exhibit 20.1    Copy of the press release relating to the completion of 
                        the Value Health, Inc. merger, dated August 6, 1997.

        Exhibit 20.2    Copy of the press release relating to the announced
                        planned changes in the Company's business approach,
                        dated August 7, 1997.


                                   SIGNATURE

        Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the 
undersigned hereunto duly authorized.

COLUMBIA/HCA HEALTHCARE CORPORATION

/s/ STEPHEN T. BRAUN
- -----------------------------------------
Stephen T. Braun
Senior Vice President and General Counsel

DATED:  August 7, 1997

EX-20.1

 
                                                                    EXHIBIT 20.1


  [COLUMBIA/HCA HEALTHCARE CORPORATION NEWS RELEASE LETTERHEAD APPEARS HERE]

- --------------------------------------------------------------------------------
                                                FOR IMMEDIATE RELEASE


INVESTOR CONTACT:                                    MEDIA CONTACT:
Victor L. Campbell                                   Jeff Prescott
(615) 344-2053                                       (615) 344-5708


                  COLUMBIA/HCA, VALUE HEALTH MERGER COMPLETED

NASHVILLE, Tenn. Aug. 6, 1997 - Columbia/HCA Healthcare Corporation (NYSE: COL) 
today announced the completion of its merger with Avon, Conn.-based Value Health
Inc. (NYSE: VH).

     The transaction was finalized today when Columbia purchased the outstanding
shares of Value Health common stock for $20.50 per share.

     The merger includes Value Health's four business units: ValueRx, one of the
nation's largest independent pharmacy benefit management companies; Value 
Behavioral Health, one of the nation's largest providers of managed behavioral 
healthcare; Community Care Network/MedView, a workers' compensation and group
health network and cost management company; and Value Health Sciences, an
information technology company which develops disease management programs.

     "We are pleased to welcome Value Health and its employees to Columbia/HCA,"
said Thomas F. Frist, Jr., M.D., Chairman and Chief Executive Officer of
Columbia/HCA.

                                   #  #  # 

EX-20.2

                                                                    EXHIBIT 20.2
 

  [COLUMBIA/HCA HEALTHCARE CORPORATION NEWS RELEASE LETTERHEAD APPEARS HERE]

- --------------------------------------------------------------------------------
                                                FOR IMMEDIATE RELEASE


INVESTOR CONTACT:                                           MEDIA CONTACT:
Victor L. Campbell                                          Eve Hutcherson
(615) 344-2053                                              (615) 344-2737

             COLUMBIA/HCA CEO ANNOUNCES PLANNED CHANGES IN BUSINESS
                                    APPROACH

   EFFORTS EMPHASIZE DEVELOPMENT OF UNIVERSAL VALUES-BASED CORPORATE CULTURE

         NASHVILLE, TN. August 7, 1997   Columbia/HCA Chairman and Chief
Executive Officer Thomas F. Frist, Jr., M.D., today announced several
significant steps that will redefine the company's approach to a number of
current business activities. These decisions signal a reaffirmation of Frist's
promise to address areas of concern that may have led to government
investigations, and to return the company to an emphasis on community-based
quality patient care.

         "We have already committed to cooperating with all governmental
agencies, but we need to do more," said Frist. "Today's announcement reinforces
the commitment I made to our board of directors on July 25 when they asked me to
assume leadership of the company. I want to make changes that will clarify our
company's business focus, institutionalize a corporate culture that
emphasizes universal values of integrity, openness and cooperation, and
enable the Columbia/HCA family of employees and affiliated physicians to provide
superior care to the more than 100,000 patients a day throughout this country
who depend on our services to make their lives better."

         The changes come as a result of the belief by Frist and Columbia/HCA's
newly appointed President and Chief Operating Officer, Jack O. Bovender, Jr.,
that the company must return to its emphasis on local community services
rather than trying to develop a national brand or profile.

         Columbia/HCA has retained the services of the law firm Latham &
Watkins, and the accounting firm Deloitte & Touche, and charged them with broad
powers: to examine the current practices of the company; to recommend new
policies and procedures; and to work with the government to resolve outstanding
issues. The company's new action plan also includes the following:

                                       1

 
          ELIMINATION OF ANNUAL CASH INCENTIVE COMPENSATION FOR ALL OF THE
COMPANY'S EMPLOYEES. "This change puts the emphasis in our compensation
structure where it should be, on providing long-term focused compensation for
the employees whom we consider the best in the healthcare industry. Eliminating
short-term cash incentive compensation will simply remove any appearance of pay
being tied to short-term objectives -- instead, we should and will appropriately
adjust base salaries to compensate our employees fairly, reflecting our belief
that they will do their best for this company and the patients we serve," Frist
said.

          SALE OF THE HOME CARE DIVISION. While Columbia/HCA will continue to
provide a broad range of comprehensive services, the company plans to divest its
home care division. "We will, however, work closely with other providers of home
care services to ensure that the highest quality of care, in the appropriate
manner, is provided to our patients. Our efforts will also focus on ensuring
that this transition is managed in a way that is sensitive to the many employees
of Columbia/HCA who provide home care services," Frist said.

           DISCONTINUED SALES OF INTERESTS IN HOSPITALS TO PHYSICIANS; UNWINDING
OF EXISTING PHYSICIANS INTERESTS. The company's discontinuation of selling
hospital interests to physicians stems from the belief that such interests
unintentionally may lead to the appearance of conflicts of interest. Management
has also begun an analysis of the actions necessary to attempt to unwind
existing physician ownership interests.

           ADOPTION OF A COMPLIANCE PROGRAM THAT IS COMPREHENSIVE. "We will look
at model compliance programs that have been undertaken by other healthcare
companies," said Frist. "Our commitment is to ensure that we have a
comprehensive program that ensures integrity in all that we do."

           INCREASED DISCLOSURES IN MEDICARE COST REPORTS. With respect to
future Medicare cost reports, the company will go beyond required disclosure. If
there is a difference between cost reports submitted to Medicare and cost
reports used for determining financial statement reserves under GAAP (Generally
Accepted Accounting Principles), the difference will be disclosed at the time
the report is filed.

           CHANGES IN LABORATORY BILLING PROCEDURES. The company will adopt
model guidelines consistent with the Department of Health and Human Services,
Office of Inspector General's laboratory compliance program, as well as build
new computer system controls and standardize the Medicare laboratory billing
process company-wide to reduce the possibility of errors in laboratory billings.

           INCREASED REVIEWS OF MEDICARE CODING. For specific DRG codes which
are identified by the industry as particularly susceptible to coding
inaccuracies, Columbia/HCA will require a two-step review process, including
a second review that is independent of operations personnel.

                                       2

 
           ESTABLISH STRONGER GUIDELINES ON ANY TRANSACTIONS WITH PHYSICIANS.
"We have the responsibility as caregivers to avoid even the appearance of
conflicts of interests," said Frist.

           The details necessary for implementing these steps are being
developed subject to laws, regulations and existing contractual obligations. It
is anticipated that several of these steps may require various regulatory
approvals from federal, state or local authorities before being implemented.

           Management believes that it is too early to anticipate what effect
such actions will have on the company's financial position or results of
operations. Certain matters in this press release may be considered forward-
looking statements that involve risks and uncertainties as detailed from time to
time in the company's Securities and Exchange Commission filings.

                                      ###

                                       3