NAPLES — A Naples-based hospital chain announced Tuesday night that its president and CEO is retiring at the end of July to head a Mormon mission in South America.
Gary D. Newsome will retire from his top post at Health Management Associates Inc. on July 31, and the board of directors already has begun a search for his successor, the company announced in a news release.
Officials of the publicly traded company reached Tuesday night declined comment beyond what was included in prepared statements.
The announcement comes as two federal agencies, the Justice Department and the Securities and Exchange Commission, are conducting separate investigations into HMA’s billing and accounting practices.
Explaining Newsome’s departure, HMA stated that he “has been called by the First Presidency of The Church of Jesus Christ of Latter-day Saints to serve as the president of its Uruguay-Montevideo Mission in South America.”
Newsome became HMA’s president and CEO in 2008, according to the company’s website.
The company owns 71 hospitals in 15 states, including Physicians Regional hospitals on Pine Ridge Road and Collier Boulevard in Collier County, and a hospital in Lehigh Acres in Lee County. The chain has about 11,100 licensed beds in non-urban locales nationwide.
Company shares closed at $11.80 on Tuesday, up 76 cents, on the New York Stock Exchange. The announcement about Newsome’s departure came about two hours after the market closed.
“I am proud of our accomplishments over the past five years as we’ve transformed Health Management into a vibrant, innovative company that is well-positioned and on a clear path to great success,” Newsome said in a prepared statement. “My family and my faith have always been the most important parts of my life and it is a rare privilege to serve in Uruguay, a place that has remained in my heart since I served my first mission there more than 35 years ago.”
The search for his replacement will be led by four members of HMA’s board of directors: Kent P. Dauten, Donald E. Kiernan, Robert A. Knox and William J. Schoen, who has served as chairman of the board since 1986.
“We respect his commitment to his faith and wish him well in his future endeavors,” Schoen said in a prepared statement. “We have been fortunate to have Gary as a steward of this company and will remain focused on the continued execution of the company’s strategic plans.”
Another longtime employee, John Merriwether, who was HMA’s vice president for financial relations, also left the company in the past month. HMA officials have declined to discuss Merriwether’s departure, which came during a series of layoffs at HMA’s headquarters in Naples and elsewhere. The company, one of Collier County’s largest employers, has declined to say how many employees were let go.
The leadership change-up at HMA comes as Glenview Capital Management LLC, one of HMA’s largest shareholders, maneuvers to have a greater say in corporate affairs.
Other hospital executives in Southwest Florida couldn’t immediately be reached Tuesday night for their reaction to Newsome’s departure.
An HMA biography of Newsome says he previously was president of hospital operations for Community Health Systems Inc., including hospitals in Illinois, New Jersey, Pennsylvania, Tennessee and West Virginia. Before that, he was with HMA for five years, serving as a divisional vice president and assistant vice president for Group Operations, and as a hospital CEO.
Newsome received a bachelor’s degree from Bluefield State College in West Virginia and a master’s degree in business administration from Butler University in Indianapolis.
The company biography says that during his tenure, HMA has seen a nearly 20 percent increase in the number of hospitals it operates, and a 20 percent increase in the number of patients going to its hospitals.
Admissions at its hospitals drew the attention of CBS news magazine “60 Minutes” in a December story that questioned the company’s emergency room admitting practices. In the TV report, former employees accused HMA of giving physicians quotas to admit patients as a way to boost company profits. HMA denies those accusations.
HMA is being investigated by the U.S. Justice Department, which is looking into the management of emergency room operations and use of the computer software Pro-Med. About a month ago, HMA disclosed it also received a subpoena from the SEC, but labeled it as a simple “fact-finding inquiry.”
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Naples-based hospital chain HMA issued the following press release this evening. Return to naplesnews.com for more on this developing story:
Health Management Associates Inc.'s Board of Directors today announced that Gary D. Newsome will retire as President, Chief Executive Officer and member of the Board of Directors, effective July 31, 2013. Mr. Newsome will continue to lead the Company until his retirement and the Board has initiated a search for a new Chief Executive Officer.
Mr. Newsome has been called by the First Presidency of The Church of Jesus Christ of Latter-day Saints to serve as the President of its Uruguay-Montevideo Mission in South America.
"I am proud of our accomplishments over the past five years as we've transformed Health Management into a vibrant, innovative company that is well-positioned and on a clear path to great success," said Mr. Newsome. "My family and my faith have always been the most important parts of my life and it is a rare privilege to serve in Uruguay, a place that has remained in my heart since I served my first mission there more than 35 years ago. I am sincerely grateful for the support I've received from the Health Management Board of Directors, management team, and our associates and physicians."
William Schoen, Chairman of the Health Management Board of Directors, stated, "On behalf of the Board and the entire Company, I want express our deep gratitude for Gary's years of dedicated service and his substantial contributions to the Company. We respect his commitment to his faith and wish him well in his future endeavors. We have been fortunate to have Gary as a steward of this Company and will remain focused on the continued execution of the Company's strategic plans."
Directors Kent P. Dauten, Donald E. Kiernan, Robert A. Knox and William J. Schoen will lead the search for a new CEO.
Health Management enables America's best local health care by providing the people, processes, capital and expertise necessary for its hospital and physician partners to fulfill their local missions of delivering superior health care services. Health Management, through its subsidiaries, operates 71 hospitals with approximately 11,100 licensed beds in non-urban communities located throughout the United States.