Houston Chronicle, January 14, 1998, Wednesday; SECTION: BUSINESS; Pg. 2

BYLINE: BILL MINTZ

Columbia/HCA Healthcare has settled a lawsuit filed by several Clear
Lake-area surgeons who had charged the hospital giant threatened their
livelihoods.

Neither side in the dispute would disclose the terms of the settlement
of the suit filed bysurgeons whose plan to build a surgery center,
announced in 1994, led to a conflict with the hospital chain. The
surgeons said that primary-care doctors linked to Columbia threatened to
not refer patients to the surgery group if the surgeons persisted with
their plans to build the center.

The surgeons also charged that Columbia would not allow them to become
partners in the surgery center at the company's Clear Lake Regional
Medical Center - even after their plans fell through.

"The lawsuit has been settled. We are pleased with the result," said
Stephen M. Hackerman, the surgeons' lead lawyer. "My agreement prohibits
me from discussing it more."

Columbia, which denied the allegations, also said the settlement
agreement prevented discussion of the terms.

The settlement came after Columbia founder and Chief Executive Richard
Scott was ousted by the company's board in favor of Dr. Thomas Frist.
The new management has said the company wants to move away from Scott's
aggressive, confrontational method of operations.

Meanwhile, Frist said in Nashville, Tenn., that Columbia/HCA officials
will be ready within two months to talk settlement - and potential fines
- with the federal government.

The company, the target of a wide-ranging federal fraud investigation,
will be finished with its own internal probe within 30-60 days, Frist
told members of the Nashville Health Care Council during a panel
discussion. Frist declined to speculate on how much the $ 20 billion
company might be penalized.