Frist thought Scott went several steps too far

In Thomas F. Frist Jr., Columbia/HCA Healthcare has the friendlier face it needs to reassure investors and perhaps strike a deal with federal investigators.

Frist agreed to sell his Hospital Corporation of America to Richard L. Scott's company in 1993, seeing in Scott an aggressive manager better able to run the world's largest hospital chain. But as federal investigators swarmed and allegations of wrongdoing multiplied, Frist questioned whether Scott had gone several steps too far.

"At any institution, there is a time for a different style to take it to the next level," Frist said Friday, later adding, "There is a trust level that is not there." Although Frist had offered some incentives for doctors to send their patients his way, he stopped short of Columbia/HCA's practice of making them investors in his hospitals. He is now scrapping this policy at Columbia/HCA. And if the Hospital Corporation of America faced its share of challenges and lawsuits from aggrieved competitors and doctors, it was never confronted by federal investigations of the nature facing Columbia/HCA. Scott wears his intensity on his sleeve. Frist, whose brother, Bill, is a Republican senator from Tennessee, comes across as a folksy Southerner -- "Big Tommy," is his knickname. "With Tommy, you really got the impression of a person who was comfortable in his position of authority," said Jeff Goldsmith, a hospital strategist. Frist had urged Scott to lighten up. When the company headquarters was in Louisville, Ky., Frist successfully urged Scott to delay his 6 a.m. Monday teleconferences by an hour, complaining that the time difference forced him to stand ready at 5 a.m. in Nashville. Unlike Scott, who is a lawyer, Frist is a doctor who made his career in the hospital business. Trained as a surgeon, Frist served as a flight surgeon in the Vietnam war but never practiced. Instead, he founded the Hospital Corporation of America with his father and another partner in 1968. He was inspired by a fraternity brother whose father started the Holiday Inn chain, transforming an industry and bringing computerization, standardization and economies of scale. Obsessed with overcoming the stereotype of doctors as poor managers, he built and bought his way into making his company the nation's largest hospital chain by the late 1980s. As Medicare cut payments, however, the Hospital Corporation of America and other chains fell from favor with investors. Frist and backers, including Richard Rainwater, responded by taking the company private in 1988 then public again in 1992. Rainwater, who was building his own hospital chain with Scott, was central in arranging the companies' merger in 1993. Frist, 58, received a bachelor's degree from Vanderbilt and his M.D. from Washington University School of Medicine. As Columbia's vice chairman until he became chairman and chief executive Friday, Frist is also the company's largest individual shareholder. His 14.6 million shares, or 2.2 percent of the company, were worth $524.7 million at Friday's close.

Copyright 1997
Provided by ProQuest Information and Learning Company. All rights Reserved.