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CEOCFO CEOCFO Monthly Analyst |
Feeling BULLISH!
Healthcare Triad Hospitals, Inc. Burke W. Whitman Interview conducted by: CEOCFOinterviews.com Biography of Burke W. Whitman is the Chief Financial
Officer of Triad Hospitals, Inc., responsible for developing and implementing the
company’s corporate financial strategy. Mr.
Whitman joined Triad in February 1999 with a background in health care, finance and
development, and he led the company’s spin-off as a separate publicly-held company
that year. He was previously President and
CFO of Deerfield Healthcare Corporation; Vice President – Finance and Development of
Almost Family, Inc.; and an Investment Banker with Morgan Stanley. He has served on active duty and in the reserves
as an Officer in the U.S. Marine Corps and serves on the Board of Marine Corps University. Mr. Whitman holds a BA degree from Dartmouth
College and an MBA from Harvard University. Triad Hospitals, Inc., through its
affiliates, owns and manages hospitals and ambulatory surgery centers in small cities and
selected high-growth urban markets. The
Company has 48 hospitals (including
one new hospital under construction) and 14
ambulatory surgery centers in 16 states with approximately 8,800
licensed beds. In addition, through its QHR subsidiary, the Company provides hospital
management, consulting and advisory services to more than 200 independent community
hospitals and health systems in 43 states. CEOCFOinterviews
– There have been a lot of changes in your company. Can you tell us about those changes? Mr. Whitman
– We continue to be very much on track with our integration of the
former Quorum Health Group, Inc., facilities into Triad.
We closed on the acquisition of Quorum on April 27, 2001, and laid out a
comprehensive plan for ourselves to integrate the two companies – to combine the
cultures, the policies, procedures, the infrastructures and the strategic planning. The integration is going very well, and we are
right on track with that plan. More recently, on September 14, we
issued a press release in which we announced that we have signed a tentative agreement to
sell our Paradise Valley Hospital in Phoenix, Arizona, to Vanguard Health Systems out of
Nashville. We decided to sell this hospital
because we are committed to having a very strong market position in every market that we
serve, either in our own right or by partnering with someone who has a very strong
presence in that market – Phoenix was our last remaining exception to that rule. It’s a big urban market, with lots of strong
players, and we had only one hospital there, with no partner. We didn’t have the same strategic position
there that we would most always like to have. It
is an outstanding hospital; it has won awards, even in this past year; it’s going to
do well and I think Vanguard is going to be happy that they have it. Vanguard is committed to building a network of
hospitals in that Phoenix market; they have several already, and this will add another to
their network. I expect it will work very
well for them. Although we are selling
Paradise Valley, we remain absolutely strongly committed to Arizona as a state and to the
Phoenix market in particular. We still have a
joint venture, of which we own 51% and Banner Health Systems owns 49%, that owns and
operates ambulatory surgical centers (ASCs), and we remain totally committed to those. They perform well, and we enjoy our close working
relationship with Banner. Unlike Triad,
Banner does have a major hospital presence in Phoenix that reinforces the market strength
of our ASCs. Banner was created a couple of
years ago through a merger of the former Good Samaritan system and the Lutheran system. We also have a very strong market share ourselves
now in Tucson, Arizona, with two full service acute care hospitals and a third facility we
are beginning to grow in the northern part of the metropolitan area. In fact, we expect our Tucson presence to grow
more rapidly than the rest of the company. The second thing we recently
announced is that we have confirmed and received approval from our board of directors to
proceed with a significant new hospital in Bentonville, Arkansas, that will replace and
enhance an existing hospital there. When we
bought Quorum, one of the markets that we acquired was the Bentonville market, with two
hospitals in northwest Arkansas – Bates Medical Center and Northwest Medical Center. We inherited an obligation to actually build a new
replacement facility for Bates and we are carrying that out. However, we decided to accelerate the project, and
we are also going to make a significantly greater investment in the project, with a larger
facility than was originally planned. We are
very excited about the northwest Arkansas market and this project. It is a rapidly growing market –
population growth is outstripping all of the infrastructure – so this hospital
replacement is actually being designed to expand later from 85 beds to 128 private beds
and to add a second bed tower as the demand requires.
We’re actually building the initial facility with the structural
capability and the space on the ground to make it even bigger as the population continues
to grow. The third thing we recently announced
is that we will continue to own and operate Quorum Health Resources (QHR), the hospital
management subsidiary that we acquired through our purchase of Quorum. We had been evaluating whether to sell or keep
QHR, and we determined that it is more valuable to us than to potential buyers. CEOCFOinterviews - When do you feel that the integration
will be completed and the two companies will operate as one?
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