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facilities as a group promotes greater efficiency and provides
economies of scale and thereby generates a profit. HCA was one
of the first public corporations to operate hospitals as a for-
profit business.
Most of petitioners' hospitals are acute care hospitals
providing a facility, personnel, equipment, and medical supplies
and pharmaceuticals5 needed to perform medical and surgical
procedures to treat injured or sick persons with various physical
disorders. Some of petitioners' facilities are psychiatric
hospitals providing medical treatment to persons with mental or
emotional disorders and drug and alcohol dependency problems.
Certain petitioners operate a variety of medically related
businesses ancillary to the hospitals, including laundries,
office buildings, home health care facilities, ambulance
companies, and laboratories.6
Description of Petitioners' Hospitals
All of petitioners' hospitals maintain and operate patient
floors on which patient rooms are situated. They also maintain
and operate kitchens which are used to prepare food for patients
and for the hospital cafeterias.
5
Hereinafter, we sometimes will use the term “medical supply”
to refer to a medical supply or pharmaceutical.
6
The parties have stipulated that our holding relating to the
change in method of accounting adjustments for petitioners'
hospitals shall also apply to the change in method of accounting
adjustments proposed for petitioners' medically related non-
hospital businesses.
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Last modified: May 25, 2011