Nowhere has Rainwater had a bigger and more controversial impact than in the health-care industry. After meeting a young Dallas lawyer named Richard Scott, the two formed Columbia Hospital Corporation to buy hospitals that were struggling financially. They were among the first major investors to understand that if they owned several hospitals, they could pool their purchasing power and get supplies at lower costs. They also wanted doctors to invest in the hospitals where they worked, believing they would find ways to make the hospitals more efficient and more profitable.

By 1991 Columbia had eleven hospitals and $500 million in revenues. In a leveraged buyout, Rainwater and other investors had also taken control of the much larger Hospital Corporation of America. When the two companies merged to form Columbia/HCA Healthcare, Rainwater's original $16 million stake in the company was valued at $200 million.

Today Columbia/HCA is the world's largest for-profit hospital chain, with 343 hospitals and annual revenues of more than $15 billion. Scott, the company's chief executive, who was recently named by Time as one of America's 25 most influential people, predicts that Columbia/HCA will acquire as many as 500 hospitals over the next few years.

While praised by financial experts, Rainwater's strategy to build the biggest health-care company he can has been criticized by some hospital executives who say that Columbia/HCA is deliberately trying to drive the not-for-profits out of business. The company, they say, will eventually hurt medical research and medical teaching programs, which are usually found in nonprofit hospitals.

Rainwater says he is simply making hospitals more efficient: "I don't understand the theory that nonprofit hospitals that run at forty percent capacity and do not pay taxes should be granted some special privilege. I like level playing fields."