(MONEY Magazine) – COLUMBIA/HCA HEALTHCARE (COL); NYSE, $43; 0.1% YIELD

COLUMBIA/HCA is a hungry 900-pound gorilla with a stethoscope. The $23 billion hospital management King Kong is easily the nation's largest integrated provider of health care. It has amassed 342 hospitals, 147 outpatient surgery centers and more than 500 home-care operations. In all, it had 40 million-plus patient visits in 1996, better than 50 times the number logged by its nearest competitor.

And it keeps growing. In January, Nashville-based Columbia expanded its reach into pharmacy benefits management when it bought $1.9 billion Value Health, a retail and mail-order drug company. Analysts applaud the move. "It's consistent with their strategy to create clout in health care," says Donaldson Lufkin & Jenrette analyst John Hindelong.

With facilities in 37 of the 50 states, the company has decided to establish Columbia as a brand name. "It makes sense, because their integration distinguishes them from the competition," says Joseph Chiarelli of J.P. Morgan. Columbia's advertising carries the tag line, "Health care has never worked like this before." And it has statistics to back up that claim. For example, a remarkable 36% of Columbia's hospitals have received "accreditation with commendation" from the government-sponsored Joint Commission on Accreditation of Healthcare Organizations--vs. fewer than 10% of all non-Columbia hospitals.

Its vast size is also helping Columbia attract the industry's most valued customers: large managed-care providers like United Healthcare and Humana. Patients from such firms accounted for 32% of Columbia's 1996 hospital admissions, and Chiarelli expects that percentage to continue growing. Such relationships benefit both sides: Columbia has a stream of patients to fill its 67,000 hospital beds, and the managed-care provider gets to deal with a single company for a broad range of services.

Hindelong thinks that additional acquisitions--and resulting cost efficiencies--will help Columbia maintain 15% annual earnings growth for the next five years. He reckons the stock can hit $53 in 12 months for a 23% return. --D.J.M.