Lutgert College of Business in the News
This is the text of a story in the Naples Daily News posted March 15, 2010
News, health care CEOs visit FGCU
The health care and news industries are in a state of flux, and that is of great interest to investors and watchers of financial markets.
FGCU business professor Howard Finch thinks Southwest Floridians should care too.
With significant operations in this corner of the country, two publicly traded companies, Health Management Associates and the E.W. Scripps Co., made their cases to money managers and investment directors at Florida Gulf Coast University on Monday afternoon. E.W. Scripps is the parent company of the Naples News Media Group, which oversees the Naples Daily News and naplesnews.com.
The presentations, and an ensuing question-and-answer session, were part of the Third Annual Investment Forum, co-sponsored by FGCU and the CFA Society of Naples.
“I can’t think of two industries that are more critical to peoples’ wants and needs than information media and health care,” Finch said. “I think it really serves two dual needs that people both want and need. In some ways, the investment part is just a bonus.”
Scripps CEO Rich Boehne and Health Management Associates CEO Gary Newsome shared with potential investors the history of their companies, the realities of the present market for their industries and the future, as they see it.
For both companies, the horizon remains unclear, but they laid out plans to charge forward.
For Health Management Associates, which has 18 hospitals and about 10,000 employees in Florida, the economic recession has provided just as many challenges as opportunities for growth.
“The topic today is how we position ourselves to thrive in the local economy,” Newsome said, relaying the topic of the day. “You know as well as I do that the economy has had a tremendous roller-coaster ride and will continue to have ups and downs.”
HMA operates one hospital in Lee County, Lehigh Regional Hospital, and two in Collier County, Physicians Regional Hospital-Pine Ridge Road and Physicians Regional Hospital-Collier Boulevard. The company also acquired a hospital in Arkansas last year, and saw operating earnings grow 8.8 percent.
“I’m not sure if Steve Jobs has those kind of results, but I think it’s very good in uncertain times and an uncertain economy,” Newsome said, referring to the CEO and co-founder of Apple Inc. “I can tell you we’re not perfect, but we’re getting better every day at delivering care.”
Newsome also predicted that the health care reform in Congress -- any health care reform -- would benefit hospitals by reducing the debt they write off each year delivering care to uninsured and underinsured patients.
On this point, Daniel Hickey remains skeptical. Hickey, the investment director for Northern Trust in Collier and Lee counties, said he worries that health care companies like for-profit hospitals are going to play a shell game when it comes to health care reform. Any money put back in their pockets because of fewer uninsured patients will be taken back out due to reduced reimbursement rates, he predicted.
“He certainly wasn’t able to make me feel any better about what’s going on in health care,” Hickey said.
Hickey also said he was interested in Scripps’ narrative as a 130-year-old media business with operations in print and online news, local television affiliates and network television operations like HGTV and the Food Network.
Boehne discussed the transition toward digital and mobile media, from a low point last year of closing the Rocky Mountain News in Denver due to unprofitability to the slow march toward an online journalism model that turns a reliable profit. While Boehne predicted newspapers will never go away, he said the move toward digital media is inevitable, and is slowly becoming profitable.
That has been a point of trouble for newspapers making the transition online — determining how to get money each time someone clicks on a story with advertising. But Boehne points out that television went through a similar phase in the 1940s and 1950s before the Nielsen Co. began measuring audience and helping television executives prove to advertisers the profitability of one program over another.
The company is going through a restructuring too, Boehne said, referring to the centralization of some functions like marketing and accounting, at regional desks rather than individual divisions for each newspaper.
In the meantime, Boehne said, his company is focusing on the content it generates, and delivering the information that makes communities better places.
“We’ve been at this 130 years,” Boehne said. “We take a long-term point of view. We’re not in the business that sells eggs, butter and milk. We don’t sell commodity. We don’t sell things you have to have. We sell creativity.”