Business Notes Health Care

Merger fever now appears to have spread to the health care field. Hospital Corp. of America, the nation's largest for-profit hospital company (1984 revenues: $4.1 billion), and American Hospital Supply, the No. 1 distributor of medical products (1984 sales: $3.5 billion), last week announced that they will pool their resources to become the largest corporate provider of health care services in the U.S. If shareholders of the two firms approve, the $6.6 billion deal will be the biggest merger outside the oil industry in American business history.

The companies plan to consolidate in order to hold down costs in the increasingly competitive market for health care services. Said American Hospital's chairman Karl Bays, 51: "I'm not sure that bigness per se is better, but the ability to integrate two major corporations that have been devoted to two separate segments of the health care field will be more efficient."

Wall Street was initially cool on the deal. The stock of Hospital Corp. of America fell 2 5/8 points, to 43 7/8, after the merger was announced, while American Hospital Supply fell from 37 points a share to 34. Nonetheless, analysts said that a flurry of medical mergers could follow as more firms seek ways to keep expenses down.