Member and Industry News

February 27, 2014

LifePoint opens ‘hospital support center’

LifePoint opens ‘hospital support center’
by Shelley DuBois | The Tennessean | Feb 27, 2014


New offices help hospitals deal with ‘massive change that’s coming’

Q&A | Bill Carpenter

LifePoint Hospitals Inc. is revealing its brand-new building in Brentwood today, full of eco-friendly bells and whistles. This is not a corporate office, insists Bill Carpenter, the company’s CEO, but rather it is a “hospital support center.”

Carpenter had led LifePoint since 2006, and has overseen its joint venture with academic medical center Duke University. The resulting hybrid, Duke LifePoint, is regarded as one of the most successful partnerships of its kind.

The industry is still in the midst of great change, Carpenter said. He spoke with Tennessean reporter Shelley DuBois.

Congrats on the new digs. Why move?

I hope you noticed when you first walked in our building that the sign says, “LifePoint Hospital Support Center.” All 470 people who work in this building are here to support the 31,000 LifePoint employees around the country in community-based hospitals. We provide a valuable service from this place.

What do the hospitals in your network need from you?

Not to be too grandiose about this, but I think we’re involved in one of the most dynamic times of change in our industry that we’ve ever seen.

In addition to the constant financial pressure that community-based hospitals feel, now they’re trying to deal with this massive change that’s coming.

You ask what can we bring? We bring the resources of a large organization that can help them deal with these issues that they’re trying to deal with today on their own. And when they try to deal with them on their own, their only option, typically, is to bring in a consultant. And that consultant (would cost basically three times) what it would be if you used the resources of a hospital support center.

LifePoint has been growing, and there are a lot of good opportunities for us to partner with new hospitals around the country, both as Duke LifePoint and just as LifePoint.

Could you talk a little bit about Duke LifePoint? It’s one of the rare success stories from a partnership between a for-profit and an academic medical center.

It is so remarkable. The reason that ours is successful, honestly, and some others have not been, is that we worked closely together on some very tough issues for probably five years before we put a name on it and said, “Now we have a partnership.” Duke is very, very protective of their brand. They would never in a million years have called something Duke LifePoint if they didn’t believe that we had the same commitment to patient care that they do.

I understand that Duke values patient care, but do investors care about that yet?

There is a change in the way that we will be reimbursed in the future and are already beginning to be reimbursed now. Therefore, it becomes more important to investors.

If a LifePoint hospital can’t prove that the care delivered there is as good or better than the hospital down the road, than the payer is going to direct patients to the hospital down the road. Better clinical outcomes become the measure by which we are judged, not only by physicians and patients, but by payers. So it affects our reimbursement, it affects our EBITDA, investors care more about that, and it becomes better synced up with what we can talk about on our earnings call.

What about your story: Did you always know you wanted to be the CEO?

I don’t know about that. Scott Mercy was the founding CEO at LifePoint when we spun off from HCA in 1999. Scott was a good friend of mine. He talked to me about leaving my law practice, where I had worked for about 20 years, and becoming the general counsel at LifePoint. So I did – Scott and I and several others started the company. A year later, Scott was killed in a plane crash. He was a pilot. He was practicing touch-and-gos with an instructor, and he crashed at an air field out near Smyrna.

Then Jim Fleetwood, our chief operating officer, became the CEO. Almost a year later, Jim had a massive heart attack. My son, Russell, was a little boy at the time. Our family was getting ready to go on vacation the day that we got the news that Jim had died. Unfortunately, at this point, I knew what to do. We had lost a CEO before, and I was the lawyer and I knew the corporate governance things that you had to put in place.

Anyway, Russell was sitting in my lap, and not many words were being spoken. He was kind of stroking my face; it was just so sweet. He said, “Dad, I sure am sorry Mr. Fleetwood died.” And I said, “Me too, Russell.” I don’t know how much time passed – it could have been a minute, it could have been a long time – and Russell, this child, looks up and me and says, “Dad, I don’t think anybody else is going to want that job.”

What a sad story. What a smart kid.

Ken Donahey, our CFO, moved into the role of CEO at that point. He served for five years, then retired, and the board made me the CEO.

Do you think your background as a lawyer is helpful?

Well, I’ll tell you one thing that was great advice to me when I was made CEO. The board said, “Hire somebody who is a better lawyer than you.” I took the board at their word on that, and I have never tried to be the lawyer for this company.

Hire a good lawyer so you don’t get bogged down in the details?

So you don’t look back.

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