R. Clayton McWhorter says his multimillion-dollar foray into the assisted-living business will be part of a growing legacy of healthcare investments.
Although the 63-year-old former top executive at Healthtrust and past board chairman of Columbia/HCA Healthcare Corp. has broken away from the daily rigors of running a healthcare firm, he will continue to invest in new healthcare companies. His latest venture is LifeTrust America, which he formed with New York-based Morgan Stanley Capital Partners to operate assisted-living facilities for the elderly in nonurban, rural and suburban markets across the country.
"Initially I will be the CEO, but I'm not going to run any company and will work (at LifeTrust) about 100 days (out of the year)," said McWhorter, who was president, chairman and CEO at Healthtrust before it was acquired last year by Columbia. "I want to help some of these young people get started and create jobs. It can be part of a good legacy."
Morgan Stanley is providing an initial $30 million in venture capital while McWhorter's investment firm, Clayton Associates of Nashville, Tenn., is committing another $3 million. McWhorter also will be a senior adviser to Morgan Stanley Capital Partners' healthcare investments. "The partnership with Morgan will move this along quicker than I could by myself," said McWhorter, who will be LifeTrust's chairman.
McWhorter remains a member of the board of Columbia, which merged with Healthtrust in 1995. He formerly was president and chief operating officer of Hospital Corporation of America. HCA merged with Columbia in 1994.
Another Nashville start-up, Gordian Health Solutions, a firm that creates wellness programs, also was a benefactor of McWhorter's investment capital (April 15, p. 54).
Through Clayton Associates, McWhorter plans to continue to invest in new healthcare companies. Earlier this year he gave $10 million to Samford University in Birmingham, Ala., where the pharmacy school will be named after him (April 29, p. 86). McWhorter is a graduate of the school and a pharmacist by training.
As part of the new venture, LifeTrust acquired Nashville-based Morningside Co., which already was in the assisted-living business. Clayton Associates owns 60% of Morningside.
LifeTrust has 40 assisted-living residences in various development stages and plans 15 more next year.
"We have a pretty good nest egg to start out with," McWhorter said. "We will still brand and operate our facilities with the Morningside name, which is a good name to use."
LifeTrust anticipates the assisted-living industry will grow along with the nation's elderly population. The number of people 65 and older is expected to be about 80 million by 2010 compared with 34 million today. Meanwhile, the assisted-living industry also is expected to boom to $100 billion in 2010 from $15 billion last year.
"LifeTrust will fill the important niche between retirement centers and nursing homes," McWhorter said. "It will blend hospitality with healthcare."