A reshuffling of management positions at Ramsay Health Care, a New Orleans-based psychiatric hospital chain, could set up the company for an eventual split.
Last month, Ramsay's board tapped Chief Operating Officer Reynold Jennings as president, giving him responsibility for the company's hospital and provider operations. Gregory Browne, the company's president and chief executive officer, will remain CEO, with direct control of Ramsay's growing managed-care operations. Ramsay operates managed behavioral health programs covering 700,000 people.
When asked whether the structure is setting up the company for an eventual split similar to the 1993 separation of Humana and Galen Health Care, Mr. Browne said, "It's not impossible." Louisville, Ky.-based Humana retained its managed-care operations while spinning off its hospitals into a separate public company, Galen Health Care. Galen merged with Columbia Hospital Corp. later in the year.
Mr. Jennings, a former National Medical Enterprises senior vice president who joined Ramsay one year ago, will handle Ramsay's diversification in psychiatric and subacute services.
Ramsay operates 15 psychiatric hospitals and recently signed a joint venture agreement to develop a behavioral healthcare system with St. Anthony Hospital, Oklahoma City. Mr. Jennings said he's discussing similar joint ventures with three other hospitals and hopes to convert half of Ramsay's hospitals to joint-venture agreements with other hospitals in their markets.
"We want to put them into collaborative system models," Mr. Jennings said.
In addition, the company has entered franchise agreements with two companies, Geriatric Medical Care, Knoxville, Tenn., and Telesis, Little Rock, Ark. Through the deal with Geriatric, Ramsay will pay a licensing fee to be the franchiser of geriatric psychiatric and medical-care units in 12 states.
Through Telesis, Ramsay will develop geriatric psychiatric programs in nursing homes.