Whitman has been a member of the Marine Corps Reserves since he ended his active duty more than 20 years ago. He spent most of 2005 leading a Marine battalion in Iraq, but he does not expect another foreign deployment. Instead, he will teach commanders who are being prepared for the war zones of Afghanistan and Iraq.
Whitman said he plans to use the same senses of mission and service as a CEO to navigate a pressure-filled landscape.
Operating pressures, such as greater competition from physicians and higher bad-debt expense, have squeezed profit margins. Patient volume has stagnated for four years, as the bounty promised by the aging baby boomer generation has yet to arrive.
At the same time, shareholders are pressuring management for better returns. Private equity firms have shown what hospital company shareholders can earn. Last years $33 billion leveraged buyout of Nashville-based HCA was the first blow. Then, in February, two private equity firms bid for Triad Hospitals, only to be trumped by Community Health Systems $6.8 billion bid. HMA borrowed $3.25 billion to pay a $10 per share special dividend in March in order to reward shareholders (Jan. 29, p. 12).
The demographics that were looking at now and looking at in the future still look very attractive to me and to us. They are one component of what generates volume to the hospitals, Whitman said. There are more alternatives now ... a more competitive environment for us, and for that reason, a number of things that we didnt need to do in the past or wouldnt make much of a difference, we absolutely need to do now.
That all starts with ensuring that HMAs three main customer groupsemployees, physicians and patientsare satisfied with HMAs hospitals. Improving satisfaction scores of these three groups was part of the strategy at Triad, Plano, Texas, which Whitman joined as it was being spun off from what was then known as Columbia/HCA Healthcare Corp. in 1999. Triad, where Whitman was chief financial officer, also is known for a focus on physician relationships.
The more important type of collaboration between physicians and hospitals is operational collaboration, Whitman said. That entails listening closely to physicians and finding out what the hospital can do to make its practice successful both clinically and financially.
Financial collaboration is the other type. Partnerships with physicians are preferred to physician employment, Whitman said. HMA is becoming much more flexible with forming joint ventures with physicians on ambulatory services and physician syndication opportunities, having completed its first such whole-hospital joint venture at its hospital in Gadsden, Ala., earlier this year. Physician employment at HMA has more than doubled in recent years, to more than 500 employed physicians, but that isnt the dominant answer for the future, Whitman said.
Building on Whitmans mission-driven personality, HMA welcomed back a former executive who worked as a religious missionary after he left the company in 1994 (Oct. 17, 1994, p. 56). Kelly Curry, 52, will be the companys executive vice president and chief operating officer starting July 1. In a securities filing, HMA said that Curry has been a consultant for HMA since September 2006 and his base salary will be $675,000. In 1996, Curry and his wife started Foundation in Christ Ministries, which operates in Ireland.