Growth. There's nothing investor-owned hospital chains are quite as obsessed with, particularly when annual report time arrives.
Just as the trees and flowers sprout in the spring, so do the future prospects of public companies in their reports to shareholders.
"The key message is the company's potential for growth," said Susan Tracy, a senior account supervisor for Lovell Communications, a Nashville, Tenn.-based firm, about the informational goal of company annual reports. Lovell has produced numerous annual reports, including the 1995 edition for OrNda HealthCorp, a Nashville-based hospital chain.
Publicly traded companies can spend as much as $1 million on their annual reports, which typically include glossy color photos and textured paper. What's more, they often feature lavish explanations about just how savvy the company and its management team have been in interpreting the demands of today's changing market.
Growth and change were frequent themes for 1995's crop of annual reports among healthcare companies. Those themes were especially prominent in the reports of Tenet Healthcare Corp. and Magellan Health Services, two companies that went through mergers and name changes in 1995.
Change is a dominant theme in the report of Tenet, the nation's second-largest hospital chain.
"This was designed to introduce Tenet because we were a new company with a new name and logo," said Diana Takvam, the company's vice president of communications.
The letter to shareholders from Tenet's top executives, Jeffrey Barbakow and Michael Focht Sr., is the second-longest among the hospital reports: five pages. "It's a complicated industry and getting more complicated," Takvam said of the amount of explanation included in the report.
Growth is also a strong theme in the report from the Santa Monica, Calif.-based hospital chain. Barbakow and Focht note: "We have been attentively evaluating growth opportunities, especially in areas where we already have a significant presence, but also in communities where Tenet is not yet as strong."
That covers a lot of ground, but it's designed to leave the impression among shareholders of Tenet's strong growth orientation.
However, growth is probably most prominent in the report of Magellan, formerly called Charter Medical Corp. The Atlanta-based firm communicates growth to shareholders by using the word "more" several hundred times throughout the report. In fact, one entire page is just the word "more" and another page features the word "more" hundreds of times over and over.
Why? The cover explains: "Charter Medical Corp. has become Magellan Health Services to accomplish more."
Perhaps the emphasis on more will cause readers to skip over the fact that the psychiatric hospital company reported a loss of $43 million, or $1.54 per share, in 1995. It might even make them forget that the company stock price slipped and failed to regain the $28 high of 1994.
However, shareholders want to know what's ahead for their company, and the report tells of its merger with a managed-care company and how that's structuring Magellan for the future.
At the opposite end of the scale was the 1995 report of Columbia/HCA Healthcare Corp. The healthcare industry's most growth-minded company turned some heads this month with a frugal-looking report for 1995 that's almost reminiscent of those of firms in financial distress.
Community Psychiatric Centers, a Las Vegas-based firm, also did an economical report without the glossy photos and elaborate charts for which such reports are known. The report is simply a reproduction of the company's 10-K filing with the Securities and Exchange Commission.
Community is going through a restructuring and reported a net loss of $41.6 million in 1995.
Obviously, that's not the case with Columbia, which generated nearly $1 billion in profits in 1995 and is on the brink of launching a multimillion-dollar advertising campaign.
The cover of Columbia's report features only the company logo and the words "1995 Annual Report."
Upon opening the document, an explanation is revealed under the heading "About this Annual Report." It notes: "In 1995, we reinvested $1.5 billion in our facilities to enable employees and physicians to provide the quality patient care that individuals in our communities need and should receive. We incorporate this operating philosophy into all facets of our workplace. As a result, our annual report has been scaled back tremendously so that we can direct even more funds into patient care, reinforcing our ability to provide quality patient care."
However, by cutting back its annual report budget-a move that saved several hundred thousand dollars, according to company estimates-the nation's largest healthcare provider isn't necessarily cutting back its marketing. It's spreading those funds among the broader array of communications opportunities.
For example, Columbia just spent an undisclosed amount to change the names of all of its hospitals to incorporate the "Columbia" name and is about to launch a national branding campaign.
Those marketing efforts go to consumers, however, and the annual report is clearly aimed at a different audience-shareholders and stock analysts.
John Runningen, a healthcare analyst at Robinson-Humphrey, an Atlanta-based investment banking firm, said that spending a lot on annual reports can be wasted on stock market analysts: "We look at the numbers. We don't look at the covers."