A family tree shows where a person comes from and how the person is related to everyone on the other branches.

The annual Family Tree published by the Nashville Health Care Council is a revealing study of the genesis of the healthcare industry in Nashville and how successful companies have spawned successful offshoots that contribute to the vitality and vigor of one of Nashville’s most robust industries.

Originally created in 1998 as a guide for investors, the annually updated document serves as a large-scale visual depiction of Nashville’s vibrant healthcare industry that originates largely from two hospital companies, Hospital Corporation of America and Hospital Affiliates, Inc., both of which were founded nearly forty years ago.

The 2007 Family Tree unveiled November 15, which records activities from July 2006 to June 2007, is a clear illustration of why Nashville is home to the premier healthcare industry cluster in the country.

Matthew S. Gallivan, Nashville Health Care Council president, said that the new chart shows the relationships of more than 575 organizations with connections to Nashville’s dynamic healthcare industry. Last year these companies generated more than $80 billion and employed more than 430,000 people on a global basis.

Gallivan said the new chart “reflects two key trends: a continued strong start-up climate and the strong trend for healthcare companies to relocate to the Nashville area.”

Highlights for the past year include the following:

• HCA returns to private ownership in a $33 billion transaction, the largest leveraged buyout in Wall Street history at the time.

• Drugstore chain operator CVS completes a $26.5 acquisition of pharmacy manager Caremark, with the CVS Caremark Corporation pharmacy benefit service operations remaining in Nashville.

• Community Health Systems completes a $5 billion+ acquisition of Texas-based Triad Hospitals to become the largest publicly traded hospital operator in the nation.

• Short-stay surgical facilities company Symbion completes a $737 million acquisition agreement with private equity firm Crestview Partners.

• Healthways acquires Arizona-based Axia Health Management for $450 million.

• Psychiatric Solutions acquires Texas-based competitor Alternative Behavioral Services in a $426 billion deal.

• California-based operator of hospital specialist programs Cogent Healthcare, Kentucky-based walk-in clinic operator The Little Clinic and Colorado-based dental managed care organization Forba Holdings move corporate headquarters to Nashville.

• Notable additions to Nashville’s healthcare market include: Americgroup Corporation, Behavioral Centers of America, BridgeWay Health Systems, BreatheAmerica, Cloverleaf Partners Healthcare Services, Health Connect Partners, Metadata, Oncology Therapeutics Network, PharmMD, ProjX and Radiation Oncology Services of America.

• Nashville healthcare start-up and early-stage companies secure more than $5.5 billion in venture capital and private equity funding since 2000.

• The Nashville Health Care Council welcomes 33 new corporate members in the last year, bringing the total membership to 156 members.

• The Nashville Health Care Council hosts briefings and meetings with high-profile policymakers and business leaders throughout the year to discuss major trends, policy challenges and opportunities for the healthcare industry, including the following: U.S. Senator Chuck Grassley (R-IA), U S. Senator John D. Rockefeller (D-WV), U.S. Representative Charles B. Rangel (D-NY), HCA Chairman and CEO Jack O. Bovender, Jr., and DaVita Chairman and CEO Kent J. Thiry.

Gallivan pointed out that “the ability to attract speakers and guests of this importance is a testament to the high regard in which the Nashville healthcare community is held, and the national and global reach of our healthcare industry.”

Gallivan continued, “The Nashville Health Care Council is able to undertake these informative briefings and international trade missions because of connections that we enjoy within the industry.”

He added, “We can use the Family Tree in economic development trade missions. The Tree is a great tool to open doors on a national and international level.”

He pointed out that the successful program activities, such as the Leadership Health Care annual trip to Washington, D.C., the recent trip to talk with Wall Street leaders, and International Trade Missions, which offer industry leaders a chance to develop connections internationally that will generate new business opportunities, are huge benefits offered by the NHCC.

NHCC is a totally self-funded organization with financial backing coming solely from member dues and fees for program activities. It is an affiliate of the Nashville Chamber of Commerce but does not receive funding from the Chamber.

Gallivan feels that the strength of the Nashville Health Care Council comes from the support it receives from industry leaders in Nashville and the standing that they have within the industry. He pointed out that the leadership of the NHCC has come from a “Who’s Who” of leaders of the industry itself, such as Wayne Smith, the current chairman, who is head of the largest publicly traded hospital company in the world; Mac Crawford, the next chairman of the Council, who heads industry giant Caremark; Harry Jacobson, vice chancellor of Medical Affairs at Vanderbilt Medical Center, who has also had an outstanding entrepreneur career as founder of Renal Care; and Jack Bovender and Tommy Frist, both past chairmen of the NHCC, who all continue to be involved in supporting the Council.

“No other city in the world has such strong support from industry leaders,” Gallivan said. “Their support keeps Nashville dynamic and helps to foster the next generation of leaders. This entrepreneurial spirit will stand in good stead for so many healthcare challenges on the horizon re: cost, quality and access. The fact that new leadership can seek advice from so many experts and so much expertise, such as hospital management expertise (HCA), and historically strong access to funding, great professional services firms with expertise in healthcare in the banking, legal, architectural and accounting fields make sure that Nashville will continue as the center of the healthcare industry.”

There are more than 250 professional support services with offices in Nashville who contribute to the success of the industry by offering experienced guidance.

Gallivan described with enthusiasm the large crowds that NHCC meetings draw (“it is routine to have 300-400 people in the room”), both from within the industry and from the professional support fields, all of whom appreciate the opportunity to have contact with a large number of policy makers.

The NHCC is at work mapping out the 2008 trade mission next fall to Stockholm and Berlin, under the leadership of Jack Bovender, a trip that will provide members with a chance to develop contacts with health ministers and ambassadors to generate new business opportunities for the benefit of Nashville’s vibrant healthcare community.



December 2007

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