For Columbia/HCA Healthcare Corp., the first 100 days of Thomas F. Frist Jr., M.D.'s reign have steered the company away from its former aggressive acquisition style, but what about the promised strategic plan?
"We'd love to tell you, but no decisions have been made," said Columbia Senior Vice President Victor Campbell.
After 100 days, that story is getting a little old, said Sheryl Skolnick, healthcare analyst at BankAmerica Robertson Stephens.
"The crucial part is the announcement of a strategic plan. Until that, we don't have any idea where this company wants to go," she said.
From the day he took the helm July 25, Frist consistently said the company will have a new value system and corporate culture, will halt its aggressive acquisition mode and will return to a local community focus. Frist also said he hoped to have a new strategy ready to roll out by his 100th day in office, officially Nov. 2.
But as the company's top official prepares for a press conference early this week in Richmond, Va., his focus will be on a new mission and values statement, and a progress update on its 12-point action plan unveiled Aug. 7.
The statement promises to be something "atypical for what you'd expect from a business," said Columbia spokesman Jeff Prescott. "It embodies what Dr. Frist has been talking about-a values-based culture."
As far as strategy is concerned, nobody at Columbia will talk. And there will be no update on the company's internal audit-being conducted by law firm Latham & Watkins and accounting firm Deloitte & Touche-which also started 100 days ago.
While Columbia has been intent on changing its public image over the past 100 days, it hasn't changed its tight control over information leaving the main office. That's frustrating to analysts, shareholders, reporters and others.
"This has been one big (public relations) spin," said Nashville-based healthcare consultant Josh Nemzoff. "None of this makes sense from a business point of view. It only makes sense from a (public relations) point of view."
The past 100 days have brought a lot of change for the nation's largest for-profit hospital chain.
Frist has recruited a new batch of top executives to help him run the company, replacing 11 of Columbia's 14 top officials.
In line with the 12-point action plan, Columbia started an internal audit to find any flaws in its billing practices. The company also has cooperated with the federal investigation, including opening its books, executives said.
Columbia has moved to a local focus, ending its national branding campaign. It also stopped 10 construction projects totaling $300 million and canceled five acquisitions or joint ventures amounting to $240 million. An additional $200 million in construction projects are under review.
Also, as promised, Columbia is planning to divest itself of its home health operations and three of four Value Health units-a company it purchased for $1.1 billion this summer and soon afterward announced its intent to sell.
While Columbia is accomplishing most of what it set out to do in its action plan, the company is seeing its bottom line suffer. Last week, Columbia reported a 69% decrease in net income for the third quarter ended Sept. 30 to $97 million, or 16 cents per share, compared with net income of $311 million, or 46 cents per share, in the year-ago quarter. Revenues were flat at $4.6 billion (See story, p. 9).
Since the first federal raids, on its facilities in El Paso, Texas, March 19, the company has seen its stock price slide from $42.38 on March 19, to $34.19 July 16-the day of nationwide federal raids-to $35.94 July 25, and to a close of $28.25 on Oct. 31.
John Runningen, a healthcare analyst with Atlanta-based Cordova Capital, said he expects the next 100 days to be a lot more interesting than the previous 100.
They have to be, Skolnick said, or Columbia will suffer even more. "I think they're hedging their bets and playing a massive game of controlling information," she said. "Patience is going to get cut short if something doesn't come out soon."
Several observers said Columbia will most likely change its name, and there is still a possibility the company will go private. They also expect Columbia to sell some of its hospitals, despite its protestations to the contrary. And the nation's largest healthcare company will eventually settle with the federal government if it is formally charged with illegal billing practices, they predicted.
Skolnick said Columbia needs to show where it will grow. Right now almost all the news is negative: the ongoing federal investigation, lower third-quarter earnings, deals being halted. The answer is growth, she said.
"It's going to take some fancy footwork to come out with a company that's growing," Skolnick said.