They're small investor-owned hospital companies, and they want to stay that way.
Ameris Health Systems, Associated Healthcare Systems and Leland Medical Centers are definitely more turtle than hare.
Nashville-based Ameris is not the first hospital venture for Joe Herring, president and chief operating officer, and Sam Lewis, chairman and chief executive officer, Herring says. They have formed several other businesses during their 12 years as business partners, most of them healthcare related.
"We're frankly not interested in going out and building a huge company," Herring says. "We're going to do what we think we can do and manage on an annual basis. We're not going to do more than that."
That attitude is a sign of what Herring calls the key to success: patience. "Our strategy has always been to operate our business without debt," he says. "We could have taken on a venture partner or we could have taken on some large capital debt to get our business going, but we decided not to do it."
Ameris owns two hospitals and is developing a third in Phenix City, Ala.
A. Ronald Turner of Associated Healthcare, Brentwood, Tenn., also has conceived, developed and sold a couple of hospital companies. After working as an accountant with the two firms that later merged to form Ernst & Young and as director of reimbursement for Humana, Turner helped start Southern Health Services, Atlanta, in the mid-1980s. The company, over time, eventually sold off its assets to various buyers, including Paracelsus Healthcare Corp., Houston.
When Paracelsus was looking to sell some of those hospitals in 1999, Turner and some patient individual investors, known as angel investors, made an offer. They didn't win the bidding, but the experience got Turner back into hospitals. Associated Healthcare owns and operates four rural hospitals.
Turner says it's not only the access to capital but the type of capital available that's important. "There's capital that's available that's very expensive or is on terms that may be inconsistent with the goals and objectives of the founders of the company that forces the founders to run the company in the same mode as a public company with quarter-to-quarter results," he says. "It can require more of a sprint than a marathon."
Leland, Plano, Texas, is primarily interested in building new hospitals with physician partners, but the firm will buy existing hospitals, too, says Vice President Daniel D'Amico. Leland has a model hospital-30 to 40 beds, operating suites and an imaging center in 50,000 square feet.
"We don't try to be everything to everybody," D'Amico says. "We try to pick out the things that we do and do them exceptionally well."
Charles Simons is chairman, CEO and majority shareholder of Leland, which was incorporated in 1992 but didn't become active until 1998, D'Amico says. The company opened new hospitals in 1998 and 1999 but does not own stakes in them any more. It owns two hospitals, one it built and opened in January 2003 and another, in Indianapolis, that it purchased from Tenet Healthcare Corp. in 2002. Leland has two new hospital projects in Texas, with construction started on a hospital in Abilene and another project set to begin in May in Trophy Club.
"We don't plan on doing 50 of these a year," D'Amico says. "We plan on doing a few of these a year and doing them well."