A Hospital CEO's Hearty Diagnosis

• James Detar
• On 6:29 pm EST, Friday November 6, 2009

Alan Miller has never been one to shrink from big tasks.

After all, he's the founder and CEO of Universal Health Services (NYSE:UHS - News), which employs 38,000 people in the 138 hospitals it manages nationwide and in Puerto Rico.

Now Miller, 72, is speaking out on one of the biggest issues of the day: health care. He's come out with a new book, "Healthcare Reform That Makes Sense: A Detailed Plan to Improve America's Healthcare System, from the Country's Leading Healthcare CEO."

Miller's call? Health care is sick, but hardly dying.

"Part of it is we should not be upsetting the whole system for things that could be fixed," he told IBD.

The way he sees it, "There are things we should reform, like insurance. We should allow companies to sell insurance across state lines. And people should not lose their insurance if they lose their job and if they have a pre-existing condition."

His Cure

Miller doesn't want a single-payer system, one where the government would compete with insurance firms to cover people.

"Basically the administration, with the public option, is looking to eliminate insurance companies. That's what they want," he said.

Still, Miller favors an overhaul. He points out that providing insurance for the poor and unemployed would improve the health care industry.

In a July 29 conference call with reporters and analysts, Miller said an overhaul "is positive for our industry because what they're talking about is increasing coverage and that's got to be helpful in charity ... and (dealing with patients') bad debt. So I think it's a positive for us."

Miller knows that industry. He's been in it 35 years. The government knows it, to the point 15f drawing on his expertise. For example, UHS owns hospitals in Puerto Rico. Miller saw that Medicare reimbursed doctors there at lower rates than in the U.S. Thanks in part to his persuasion, Congress in the Medicare Modernization Act of 2003 stipulated that Medicare reimburse doctors in Puerto Rico at the same rate as doctors in America.

He's also advised the Federal Mediation and Conciliation Service, which helps mediate labor disputes.

All the while, he encourages budding entrepreneurs.

And he pushes education, something the College of William & Mary in Williamsburg, Va., recognized with the Oct. 2 dedication of its Alan B. Miller Hall.

A 1958 graduate of William & Mary, Miller donated much of the funds and led fundraising for the $75 million building. That follows his philosophy of helping those who lifted him along the way.

"At some point 14 your career if you've been successful and have extra funds, you want to contribute to people that have been helpful to you," he said.

Lawrence Pulley, dean of William & Mary's business school, lauds Miller for his magnetism.

"He relates well to people," Pulley said. "You sit down with him and you feel drawn to him. He's a very thoughtful fellow."

Pulley recalls when Miller spoke to the college's students zeroing in on entrepreneurship. One asked about the difference between health care in America and in France, where Miller had worked.

Miller went into a description of America's strength in health care, but suddenly remembered that one of the students came from France. Had he offended her?

"He stopped in the middle of the session and reached out to her in a most gracious manner," Pulley said. "That really caught our students up short -- that he would stop a conversation and reach out personally to someone to see how they feel."

While recognizing other countries' pluses, Miller keeps America on a pedestal -- as a land of opportunity, especially for those who work hard. "That's what makes America different," he said. "Our incentive system gives the ability to people from any walk of life to be extraordinarily successful. I would like to see that continue for my children and grandchildren. It's the greatest country in the world; it's for anybody and everybody."

The key to success, he stresses, is sweat. "Anyone who is willing to work hard and take risk, that's the backbone of America," Miller said.

With Miller at the helm, Universal Health Services continues to thrive.

The firm's profit has increased four straight quarters, with annual sales vaulting the $5 billion mark.

IBD gives its shares a 94 EPS Rating, which means the company's earnings per share have outperformed all but 6% of all stocks for the last two quarters and the last three to five years. It has the highest EPS Rating in the Medical-Hospitals group.

And it's on course toward more expansion. At the end of the second quarter UHS completed its buyout of Centennial Peaks Hospital, a 72-bed facility in Louisville, Colo. UHS, based in King of Prussia, Pa., plans to add 600 beds to its hospitals through 2010.

Stock Rocket

UHS shares have shot up 1,800% since the firm went public in 1981, three years after he started it.

No wonder Modern Healthcare magazine has named Miller one of the 100 most influential people in health care every year since 2004.

A native New Yorker, he received a B.A. degree in 1958 from William & Mary and an MBA in 1968 from the University of Pennsylvania, where he's on the executive board.

Miller married his wife, Jill, the same year he graduated from Penn. He attributes much of his success to her loving support.

For those at a new job or starting a company? Miller has this advice: "Be ready to give it your all."

Buzz up!