The latest investor-owned hospital company to grab attention from the Nashville area is Attentus Healthcare, which has raised $77 million to buy small, rural hospitals.
The privately held company's founders-HCA veterans Richard Gore and Robert Yeager-may also grab some attention. They are the co-chief executive officers and large shareholders of Attentus, Latin for "attentive to or attention."
Attentus, based just outside Nashville in Franklin, Tenn., doesn't have any hospitals yet. But Gore and Yeager have raised $77 million from outside investors for their new company. The primary investor is JLL Partners, a private equity firm whose previous healthcare investments include OrNda HealthCorp, and Iasis Healthcare Corp. JLL has invested $75 million in Attentus. Clayton Associates, which is run by former HCA and HealthTrust executive R. Clayton McWhorter, has put $2 million into the company.
Gore and Yeager said they have compiled a database of 870 hospitals that fit their profile. The company seeks hospitals that are the only or the primary hospital in municipalities with populations of 20,000 or more. Attentus is targeting hospitals with revenue between $10 million and $30 million-too small, Gore and Yeager believe, to interest the four publicly traded hospital chains-Community Health Systems, Health Management Associates, LifePoint Hospitals and Province Healthcare Co.-that use a rural strategy.
"They've all kind of moved upstream, quite frankly," said Gore, who helped Martin Rash found Province in 1996. "As we understand it, they're all looking at properties with $25 million net revenue and up. We're looking in the $10 million to $30 million range."
Like the big rural companies, Attentus will look for hospitals where investments in services and physician recruitment can persuade residents to get their care at their local hospital instead of migrating to large metropolitan areas, Yeager said.
A host of factors make 2004 an ideal time to buy rural hospitals, Yeager said, including the aging of the population, telemedicine technology and the reimbursement increases for rural hospitals in the Medicare drug law that was enacted last year.
Gore and Yeager both worked for HCA and Quorum Health Group. Yeager also served as CEO of OrthoLink Physicians Corp., where he presided over the selling of the company to United Surgical Partners International.