Two other executives are also leaving, Baptist said. Warren Payne, a former Baptist board member who became president and chief executive officer late last year, resigned effective Oct. 15. Payne began to wind down his role with the system in September. Caryn Conklin-Hawthorne, chief financial officer, will leave Baptist at the end of October after more than 18 years. Conklin-Hawthorne will become CFO at 253-bed Eisenhower Medical Center, Rancho Mirage, Calif.
Clapp and his brother, Mark, a physician, have formed a new company named Restoration Healthcare, Knoxville. Steve Clapp said in an interview that the name refers to the company's aim to re-establish services that small, rural hospitals have lost to other competitors. The company will look for hospitals in markets that are too small for publicly traded for-profit hospitals to have an interest in, he said.
Clapp acknowledged that several well-run, privately held companies are already pursuing hospitals in these smaller markets, but he said Restoration would be able to compete with them for acquisitions because of its physician joint venture model. Also, he said, Restoration would be interested in hospitals that are too small even for the privately held companies, which are more willing to acquire small rural hospitals than the publicly traded chains.
Restoration will target hospitals that have strained, but not poisoned, relationships with local physicians and are in need of capital and management expertise, he added. "We want to make sure that the physicians and the hospitals are economically aligned, so there's not the competition for very scarce resources and patients in those very small communities," Clapp said. "We're looking for opportunities where the physicians have not extracted the diagnostic (services) completely out of the hospital, but where there's some tension in the relationship."
Restoration Healthcare is willing to negotiate joint ventures with hospitals and physicians, and will not insist on owning a majority stake in the ventures, Clapp said. Several individual investors are funding the company, but no venture capital money has been raised, he said, declining to name the investors already onboard. Clapp said he hopes to complete an acquisition in the next 30 to 60 days.