NASHVILLE, Tenn. -- When healthcare executive Jack O. Bovender Jr. left retirement in 1997 to return to HCA, the hospital company was the target of a federal fraud investigation, its chairman and CEO had been forced to resign and its earnings were in a tailspin.

Today, observers say the company Bovender helped restructure is healthier than it's been in years.

Revenue at HCA Inc. rose to $18 billion last year from $16. 7 billion in 2000. Its stock has rebounded to the $42 range after plunging from $44 into the teens in 1997, and analysts predict 15 percent growth in earnings per share over the next several years.

"The restructuring brought back focus and discipline to its asset base," said Frank Morgan, an analyst with Jefferies & Co. in Nashville. "It has proven to be a very prudent move."

Bovender, who was HCA's president and took over as chairman when company co-founder Thomas Frist Jr. stepped down Jan. 1, attributes the success to changes in philosophy and culture at the company formerly known as Columbia/HCA.

After years of aggressive growth in which it acquired about 350 hospitals, the Nashville-based company began downsizing in 1997 and 1998, selling or spinning off more than 100 hospitals and medical offices and its home health care division. It began concentrating on hospitals in burgeoning metropolitan areas of the South where it had strong market penetration and good prospects for long-term growth.

Under former chairman and CEO Rick Scott, the goal was to be "the Wal-Mart of healthcare," Bovender said, by building a nationwide network of hospitals, home health centers and other services. Scott went on a buying spree and started a nationwide branding campaign in 1996 to make Columbia/HCA synonymous with hospitals.

But in the early 1990s the U. S. Justice Department accused the company of defrauding Medicare by listing expenses in its cost reports that the federal program doesn't cover. In 1997, federal agents raided offices in several states searching for evidence.

The board of directors ousted Scott and president and chief operating officer David Vandewater in July 1997, and HCA pleaded guilty in 1999 to defrauding government health care programs. It has paid $840 million in criminal fines, civil penalties and damages.

After Scott left, Frist, who started HCA with his father in 1968, took over as chairman and CEO and picked Bovender as president and chief operating officer. Bovender had held the position with HCA before he retired in 1994, the year Columbia Hospital Corp. merged with Hospital Corp. of America to become the largest hospital chain in the country.

Under its new management, HCA retrenched. It sold 34 ambulatory surgery centers to HealthSouth of Birmingham, Ala. , and spun off 61 hospitals into two new publicly traded companies -- Nashville-based Lifepoint Hospitals Inc. and Dallas-based Triad Hospitals Inc.

It also consolidated back-office and warehousing operations and turned away from deep discounting contracts with health insurance companies, a practice that had squeezed HCA's profit margins.

The changes freed cash that HCA is reinvesting in equipment, expansions and new hospitals in markets where it is strong.