attachment_4Section:
Health Care Hall of Fame
Bays built healthcare legacy on foundation of tireless innovation
In many ways, the late Karl Bays was the E. F. Hutton of healthcare.
In one of the brokerage firm’s well-known commercials, a subway train filled with commuters would go silent when a passenger mentioned the firm’s name, the commuters craning their necks to hear the wise advice the passenger received from his broker.
“When E. F. Hutton talks,” an announcer would intone, “people listen.”
In the life of Karl Bays, everyone in a meeting of healthcare executives would focus his eyes on the chairman and chief executive officer of American Hospital Supply Co. when he walked into the room.
And when Bays talked, they listened. So did the three presidents he advised, and the countless members of Congress he lobbied on behalf of not only healthcare suppliers but also the healthcare industry as a whole.
Bays had a “commanding presence. People would notice this guy,” says Terry Mulligan, a longtime friend of Bays and his co-worker at American and at Baxter Healthcare, which purchased American in 1985. “He would make sure that he spoke to everyone in that room, either because he went up to them or they wanted to come up to him.”
For that presence, for his stewardship at American, for his forceful lobbying and for his leadership of his local community hospital as trustee and chairman, Bays is one of the three inductees in Modern Healthcare’s Hall of Fame, class of 2001.
Last of the national leaders
“I think his biggest contribution to healthcare was clearly his pushing and forcing the issue of CEOs getting more involved with politics,” says Michael Bromberg, the former head of the Federation of American Hospitals. Bromberg came to know Bays well in the 1970s, particularly as they combined forces to lobby against provider price controls proposed by the Carter administration.
“We really don’t have that many national leaders left, whether in healthcare or other businesses,” says Bromberg, who is now counsel at Steelman Health Strategies, a Washington-based lobbying firm. “Karl was really just the last of a breed.”
Bays, who died in 1989 at age 55, rose to the heights of healthcare from humble beginnings. He was born Dec. 23, 1933, in Loyall, a small, poor town in southeastern Kentucky coal country. His father was a railroad man, laying tracks first for a coal-mining company and later for the Louisville and Nashville Railroad. When Bays was in fourth grade, the family moved to nearby Corbin, Ky. There, Bays met Billie Jo White, who would become his high school sweetheart and, in 1955, his wife.
From Corbin, Bays moved on to Richmond, Ky., where he attended Eastern Kentucky University on a football scholarship. He played well enough to be drafted by the then-Chicago Cardinals. He studied hard at EKU, and earned his bachelor’s degree in 1955. After a two-year stint in the U.S. Marine Corps, he was accepted into the master’s in business administration program at Indiana University in Bloomington. Bays earned his MBA in 1958.
Shunning job offers from prestigious companies such as IBM and Procter & Gamble, Bays began his career pitching American Hospital Supply products in Kentucky, then a virgin territory for American.
After a series of other sales jobs and the experience of starting American’s international division, Bays became chairman and CEO of the Evanston, Ill.-based supplier in 1971, at age 37. “He always, always wanted to run something,” says Billie Jo Bays, Karl’s wife of 34 years.
Mulligan began working with Bays in 1970 and worked with him closely in American’s corporate office starting in 1978. Mulligan rose to the level of vice president by 1980.
“He had a great little saying on his desk: ‘All the spectators, please leave the field. The game is about to begin,’ ” Mulligan says. Bays would pop into his subordinates’ offices, “even if you were three levels down,” and soon, he knew what you knew, Mulligan says. “If he gave you a pat on the back,” he adds, “you felt great. You went home and told your wife about it.”
Bays told his management team that American was “going to sell to the customer the way the customer wants to buy,” Mulligan says, even if the customer’s needs and wants made life more difficult for American. “How many organizations do you know today that try to do that?” Mulligan says.
A big idea
All the while, as Bays was building American’s sales to $3.5 billion in 1985 from $500 million in 1971, he had a bigger concept in mind. Bays wanted to build a healthcare colossus that would combine a supplier, a provider, a pharmaceutical manufacturer and a medical technology company, Mulligan says. As the first step, Bays wanted American to merge with Nashville-based Healthcare Corporation of America, now known as HCA-The Healthcare Co.
The deal was unveiled in a news conference in March 1985. Almost immediately, the deal drew criticism from some of American’s customers–they were also HCA’s competitors. Some of the customers looked for, and found, other suppliers.
“Whether it was a good idea or a bad idea, it was a big idea,” Bromberg says. “He was a guy of big ideas. He was not just a nuts-and-bolts CEO who made the trains run on time.”
As American and HCA moved ahead, Deerfield, Ill.-based Baxter Healthcare, then known as Baxter Travenol Laboratories, stepped in. Baxter trumped HCA’s per-share offer and shareholders eventually approved Baxter’s $3.8 billion offer. The companies merged in late 1985.
“Karl wasn’t happy about it, it’s fair to say, but he was resolved that it was the best thing for the shareholders of American, at least short term,” Mulligan recalls. “But he never got to see (his) dream. I think it’s fair to say he never got over it.”
Billie Jo Bays says it was the only down time in her husband’s career. “Anyone who went through that with American will tell you it was a very bitter pill, but everyone who (went on to work) for Baxter turned a page and tried to do the best they could for their company,” she says.
Bays stayed on for a year as Baxter’s chairman, then left the company to head Chicago-based Whitman Corp. starting in July 1987. He oversaw a transformation of Whitman from a conglomerate into a focused consumer goods company until he died on Nov. 6, 1989, after suffering a heart attack.
Bays was intimately involved in healthcare near his home, too. He served as a trustee at 214-bed Lake Forest (Ill.) Hospital from 1973 to 1980, including a stint as chairman in 1977-78, and his influence is still felt, says William Ries, a 25-year veteran of the hospital and its CEO and president since 1984.
Bays used his persuasive powers to get the board to buy a 100-acre parcel of land adjacent to the hospital’s campus, even though it was more land than the hospital could foresee using, Ries says. The hospital has built child-care and fitness centers and a retirement community on the land. “The point is, that single decision in 1978 is probably one of the things, here and now, (almost) 25 years later, that is our single largest asset and strength of the organization,” Ries says. “It has allowed us to become so much more than just a community hospital.”
Worked hard, played hard
Beyond his many accomplishments, the many honors he won–including the Marine Corps’ Semper Fidelis Award and the Horatio Alger Award–and his place in the healthcare establishment, those who knew Karl Bays also remember a warm, funny man with a lot of style.
Bromberg recalls fondly the fat cigars Bays would hand out, and the way he always made a splash at hospital conferences. “He threw a hell of a party,” Bromberg says. “I remember when he brought the Mormon Tabernacle Choir to an AHA (American Hospital Association) meeting.”
Ries remembers Bays as “a tough taskmaster professionally and financially . . . yet, at the same time, he was very personable, very warm” toward the Lake Forest Hospital administrators, doctors and other employees.
Mulligan recalls the energy Bays brought to everything, work or play. “He was a workaholic. He loved going fast,” he says. “It’s one of the reasons why he died so young. He was burning the candle at both ends. He didn’t want to miss anything.”
PHOTO (COLOR): Karl Bays, who died in 1989, developed a commanding presence that influenced U.S. healthcare for decades.
~~~~~~~~
By Vince Galloro , publisher Galloro
Copyright of Modern Healthcare is the property of Crain Communications Inc. (MI) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use. Capella University Week 7 Improvement in The Healthcare Legacy Presentation
