In the Nashville music scene, names like Garth and Wynonna need no further explanation.
In healthcare circles, names like Hud (HealthTrust's W. Hudson Connery Jr.), Charlie (OrNda Healthcorp's Charles Martin) and Clayton (HealthTrust's R. Clayton McWhorter) also bring instant recognition.
A congenial town where 60 healthcare companies are based, Nashville, Tenn., exemplifies the maxim that the healthcare industry is a small world.
Healthcare ranks first before printing and music as the top industry in Nashville, according to the Nashville Area Chamber of Commerce.
Even with the loss of Hospital Corporation of America's headquarters to Louisville, Ky., healthcare is likely to stay on top, observers say.
Healthcare accounts for 45,000 jobs and $3 billion in revenues in Nashville, the chamber estimates. Of those jobs, the chamber calculates that about 25,000 are in direct services and the remainder are held by employees of other healthcare corporations.
Music ranks second with a $2 billion impact on the city.
Because of the concentration of healthcare companies, headhunters must starve in Nashville. When asked if they'd ever used one, several top healthcare executives said they'd never needed to.
"Because we know one another, I can pick up the phone and make a call," said Mr. Connery, who recalls running into OrNda's Mr. Martin and HCA's chief operating officer, Jack Bovender, while Christmas shopping one year. "That should not suggest that we're not fiercely competitive; when we have to compete, we do compete."
HCA, HealthTrust and Quorum Health Group traditionally have shared government lobbyists. In addition, a legion of vendors exist to serve healthcare companies in Nashville-companies like Inforum, an information services firm.
Mr. McWhorter, HealthTrust's chairman, said he thought it would be advantageous if Nashville's healthcare companies shared a common campus, where they could interact for conferences and meals.
A major impetus for Nashville's health industry growth came when HCA bought two hospital chains-
General Care Corp. in 1980 and Hospital Affiliates in 1981. Many of those who left after the consolidation started their own firms.
Many looked around and said, "They're no smarter than I am, I can do this, too," said Joel Gordon, whose company, Surgical Care Affiliates, now operates 60 outpatient surgery centers in 12 states. To start Surgical Care, HCA gave Mr. Gordon a $2 million capital infusion plus a $6 million credit line.
Mr. Gordon said Nashville banks and investors understand healthcare. J.C. Bradford, one of the nation's largest independently owned brokerage firms, has underwritten 10 healthcare offerings worth $300 million in the past seven years.
Companies started by Hospital Affiliates alumni include American HealthCorp, an inpatient diabetes treatment company, and Rehability, an outpatient rehabilitation firm.
HCA spun off HealthTrust, Quorum and Allied Clinical Laboratories. In addition, last year's restructuring of its psychiatric hospital operations led to Behavioral Healthcare Corp., a psychiatric hospital company started by former HCA psychiatric group president Edward Stack.
Those spinoffs have financed other companies. Last year, HealthTrust took a small equity stake in American Transitional Hospitals, a company that leases hospital floors for use as subacute-care units.
"Nashville is the center of healthcare," said Robert Crosby, American Transitional's chairman and chief executive officer. Mr. Crosby moved the company, which has 100 Nashville-area employees and annual revenues of $15 million, to Nashville from Houston when he was hired in 1992.
He, too, believes Nashville's loss of HCA will translate into more new healthcare startups. "You'll see the number of companies increase," he predicted.
Healthcare also has infiltrated politics in Nashville. The city's mayor, Philip N. Bredesen, founded Healthcare America, an HMO, in the den of his home in 1980. He later headed Coventry Corp., another HMO company in which he continues to own an $8 million stake. Mr. Bredesen is now considered the leading Democratic candidate for Tennessee governor in the August primary election.
In addition, William Frist, M.D., son of HCA founder Tommy Frist Sr., M.D., and brother of Columbia/HCA Chairman Tommy Frist Jr., is seeking the Republican nomination for the U.S. Senate.