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Frist to Step Down as HCA Chairman

Health care: Co-founder said he has successfully restructured the for-profit hospital chain.

July 31, 2001|MICHELLE WILLIAMS | ASSOCIATED PRESS

NASHVILLE — Thomas F. Frist Jr., co-founder of HCA, said Monday that he is stepping down as chairman of the nation's largest for-profit hospital chain, effective Jan. 1. Jack O. Bovender Jr., president and chief executive, will replace him.

Frist, 62, who returned as a top executive four years ago amid a management shake-up and a federal fraud investigation, said he and Bovender had successfully restructured the company and it was time for him to step aside.

Richard M. Bracken, president of HCA's western group, was promoted to chief operating officer, effective Monday. He will add president to his title once Bovender, 55, becomes chairman.

Samuel N. Hazen, chief financial officer for HCA's western group, will replace Bracken as division president.

Bovender said the appointments of Bracken and Hazen will allow them to take office before the company begins its annual planning and budgeting process for 2002.

Frist, the brother of Sen. Bill Frist (R-Tenn.), said he will continue to work with management as a member of the HCA board and as one of the company's largest shareholders.

Health-care industry analysts said the announcement shows the company is on track with its reorganization plan.

"It clearly indicates Tommy Frist thinks that what he had to come back to do has largely been accomplished," said Gary Taylor, an analyst with New York-based Banc of America Securities. "The company is now solid and financially stable. He doesn't need to be as actively involved as he was."

HCA last week posted second-quarter net income of $263 million, beating Wall Street's expectations.

Frist and Bovender began a major restructuring after a federal fraud investigation caused profit and stock prices to tumble.

Richard L. Scott was ousted as chief executive in July 1997 and HCA got out of the home health-care business. The company has since sold or consolidated more than 100 hospitals.

Two executives were convicted in Florida in 1999 of helping cheat federal health-care programs out of $3 million in a complex billing scheme.

Last year, HCA agreed to plead guilty to defrauding government health-care programs and to pay more than $840 million in criminal fines, civil penalties and damages.

HCA shares rose 53 cents to close at $45.48 on the New York Stock Exchange.

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