Sunday, April 26, 2015

Ex-Medicare Chief to Join Board of LifePoint Hospitals

Bloomberg reported:

Marilyn Tavenner, who resigned as head of the Centers for Medicare and Medicaid Services earlier this year, is returning to the hospital industry.

Tavenner is joining the board of LifePoint Hospitals Inc., which operates more than 60 hospitals in 21 states. Before she began state government work in 2006, Tavenner had worked at the largest for-profit hospital chain, HCA Holdings Inc., for 25 years.
LifePoint's SEC filing on Tavenner's appointment failed to show LifePoint's HCA roots.  HealthTrust and LifePoint were both spun off from HCA in 1999. Later HCA sold out to KKR, a private equity underwriter (PEU)..

LifePoint paid its non-employee directors about $300,000 in cash and stock in 2013, according to the company’s 2014 proxy filing.
Board compensation for 2014 averaged $340,000 according to the company's 2015 proxy filing.  It's a pretty good first gig for an ex-public servant.

Alongside Tavenner on LifePoint's board are private equity underwriters from Gridiron Capital and Fenway Partners.  The company's proxy statement included:

The Company competes for executive talent with numerous smaller private equity-backed hospital management companies located in the Nashville area, including Iasis Healthcare Corporation, Ardent Health Services, Capella Healthcare, Inc. and RegionalCare Hospital Partners, Inc., as well as dozens of other investor-owned healthcare service providers. 
Private equity is pervasive in healthcare and behind its many distortions.  LifePoint's newest board member knows PPACA inside and out.  She will help LifePoint navigate a more prosperous route in her many roles:

She will serve on the Board’s Audit and Compliance Committee, Compensation Committee, Corporate Governance and Nominating Committee and Quality Committee. 
LifePoint expanded their board for her inclusion:

The appointment of Tavenner increases the size of LifePoint Hospitals’ Board from nine to ten members.
This harkens back to Tenet Healthcare's addition of board member Jeb Bush in 2007.  The value of politically connected board members is too great to pass up.