Burke Whitman expected the promotion, but the lack of surprise didnt seem to lessen his excitement last week.
Whitman, 51, was named chief executive officer of Health Management Associates, Naples, Fla., effective June 1. Whitman joined HMA as president and chief operating officer in January 2006; he will retain the title of president. Whitman replaces Joseph Vumbacco, who has been CEO of HMA for the past six years. Vumbacco, 61, will retain his title as vice chairman and will work on construction projects, legal issues, and federal and state governmental relations.
Speaking at an investor conference last week, Whitman said, I believe what it (the promotion) means is that our board is fully behind the initiatives and things that we are doing now to create real catalysts for growth in earnings and value.
Chief among those catalysts is a drive to improve patient, physician and employee satisfaction scores because Whitman said that taking the steps necessary to improve those scores would also improve patient volume. Thats the strategy that was employed at his previous employer, Triad Hospitals, Plano, Texas, where Whitman was executive vice president and chief financial officer. When Triad was spun off from the then Columbia/HCA Healthcare Corp., Nashville, in May 1999, Whitman said, its hospitals had satisfaction scores below the national average. As those scores rose after the spinoff, Whitman said, Triad hospitals posted 6% to 8% annual growth in volume over three years.
This will take some time, but it will come, he said. It absolutely will come.
The other two initiatives are boosting revenue with better managed-care contracting and case management, and improving the financial performance of employed physicians. HMA has sharply boosted the number of physicians it is employing to more than 500 over the past several years. The rising costs of employed physicians and treating uninsured patients have squeezed HMAs margins in recent quarters.
HMA is taking other pages out of Triads playbook. The company completed its first syndication earlier this year at 281-bed Riverview Regional Medical Center, Gadsden, Ala., and plans other joint ventures with physicians, both in outpatient facilities and hospitals, Whitman said. In late 2005, HMA announced its first joint venture with a not-for-profit hospital, buying an 80% interest in 68-bed Orlando Regional St. Cloud (Fla.) Hospital from Orlando (Fla.) Regional Healthcare (Nov. 7, 2005, p. 4).