SPECIAL REPORT: OC 50 – Healthcare
Profiles of the County’s most influential business people
LAWRENCE MEAD HIGBY
CEO, President,
Apria Healthcare Group Inc.
Born in Pomona, June 15, 1945
Lives on Lido Isle
Recently became sole top dog at Apria, nation’s largest home healthcare provider with more than $1 billion in yearly revenue. Named permanent chief executive on Feb. 13, succeeding turnaround specialist, 2001 OC50er Philip Carter, who worked with Higby to lead Apria revival.
Seen as more personable than Carter. Plans to stay course of internal growth, acquisitions, cutting costs. “We don’t plan any immediate short-term changes in the strategy because it’s one I helped develop,” he says.
Three years of profitability under his belt. 2001 net income up 26% to $72 million. Company provides home drug infusion treatments, wheelchairs, other products. Stock on tear in March, most of April, after initial drop on Carter’s exit. Market value of $1.4 billion at recent check.
Sees growth ahead for home healthcare. Counts diversified customer base: 70% are HMOs, other private payers; 30% government.
Company came about from 1995 merger of Abbey Healthcare Group, Homedco Group. Trying marriage marked by initial culture clashes, board scrums, system glitches, piles of uncollected payments later smoothed out.
Pre-Apria career includes running 76 Products, Costa Mesa-based oil refining and marketing company. Negotiated 76 Products’ 1996 sale from Unocal to Tosco for $2.1 billion. Served as Taco Bell’s top marketer. Oversaw development of Pepsi challenge. Former president, Los Angeles Times Orange County edition.
Came to Apria via the old Homedco faction, once led by fellow OC50er George Argyros, who left as a director in 1998.
Political activities include serving as principal aide to the late H.R. Haldeman, President Nixon’s chief of staff, and as a leader of the New Majority. Said to receive faxes from White House at Apria office. Party to Broadcom lawsuit but now says name should have been withdrawn.
Bachelor’s in political science from UCLA, attended business school there. Board memberships include Southern Counties Oil, Ross Stores, Performing Arts Center, South Coast Repertory.
Married to Dee, met while working summer jobs at Disneyland. Former chairperson of South Coast Repertory; three grown sons and a daughter. Likes skiing, jogging, music, theater and boating.
,Vita Reed
MICHAEL A. MUSSALLEM
Chairman, CEO,
Edwards Lifesciences Corp.
Born in Gary, Ind., Nov. 21, 1952
Lives on Balboa Island
Only chief Edwards has had since 2000 spinoff from Baxter International. Says innovation key to keeping up pace at heart valve maker. Boosting R & D; spending some 20% this year vs. 2001, which saw a 16% R & D; increase from prior year. Still playing R & D; spending catch-up to bigger rivals.
Pushing diversification beyond heart valves. Company bought rights to develop more products last year to treat peripheral vascular disease. Company also resumed clinical trials of Lifepath AAA system for treating abdominal aortic aneurysms; Europe’s already approved product. U.S. nod expected
2001 sales of $692 million, down 11% after shedding some units, up 4.4% excluding selloffs. Divestitures helping bottom line: 2001 profit up 24% to $63 million, excluding charges.
Company counted market value of $1.6 billion at recent check.
About half of revenue derived from outside U.S. Does business in more than 80 countries. Besides heart valves, valve repair devices, products include heart monitoring catheters, vascular therapies. Production in Irvine, Europe, Latin America, in Japan through joint venture with Baxter. Employs 4,811 worldwide, 1,492 in OC.
Mussallem joined Baxter in 1979, worked at Union Carbide before that. Named Baxter general manager of access products; promoted in 1986 to vice president, product development for Parenterals. Became general manager of Baxter’s pharmaceuticals unit in 1987, president of Bentley Labs division in 1989.
Named president of Baxter’s critical-care division in 1993, group vice president of Baxter’s surgical group in 1994. Assumed oversight of Baxter’s cardiovascular business from 1995 until spinoff as Edwards.
On boards of AdvaMed, California Healthcare Institute, Keck Graduate Institute, World Heart.
Bachelor’s in chemical engineering from the Rose-Hulman Institute of Technology in Terre Haute, Ind.
Married to wife Linda for 25 years; no children. Enjoys jogging and skiing. Diehard Chicago Cubs fan who keeps cap in office. Interested in projects for people with special needs because brother has Down’s syndrome. Heritage is Lebanese.
,Vita Reed
MILAN PANIC
Chairman, CEO,
ICN Pharmaceuticals Inc.
Born in Belgrade, Yugoslavia, Dec. 20, 1929
Lives in Newport Beach
Mixes continental charm with reputed hot temper, facing yet another battle with dissident shareholders over his plan to split ICN into three public companies.
Last year, shareholders felt Panic moved too slowly on restructuring, successfully ran slate of directors that defeated management-backed group. Making progress: biotech jewel Ribapharm made public debut last month. Set up separate board for other planned spinoff, ICN International. ICN Americas is third piece set to separate when restructuring plan is done.
Panic slated to be chairman, chief executive of ICN International, non-executive chairman of ICN Americas. No role planned for Ribapharm. ICN still owns 80% of Ribapharm, set to distribute stake to ICN shareholders. Seen moving into “honorary guy role” after restructuring.
Battled in recent weeks with Iridian Asset Management, Franklin Mutual Advisors, which together hold around 10%, over speed of breakup, corporate governance issues. Also tussled with Special Situations Partners over similar issues. Past skirmishes with other shareholders, SEC.
Founded ICN in early 1960s with $200. The 72-year-old’s global career has encompassed politics: former prime minister of Yugoslavia, lost rigged 1992 election for Serbian presidency to war crimes defendant Slobodan Milosevic. In 1999, ICN plant was seized in Yugoslavia, leading to a $235 million write-off. Close to former President Clinton, but opposed Serbian bombing.
ICN racked up $858.1 million in revenue, net income of $64 million last year. Market value of $2.3 billion at recent check. Panic has argued that it should be close to $4 billion,rare area where he and dissident shareholders agree.
Survived several ouster attempts, but could be forced to deal with a majority of board members not backed by management if dissident shareholders are successful in proxy showdown at ICN’s annual meeting May 29. Has survived three attempts on his life, settled six sexual harassment lawsuits.
As a teen, fought in the Nazi resistance. Defected from communist Yugoslavia during a bicycle race. Attended University of Belgrade, University of Heidelberg and USC. 1986 recipient of the Ellis Island Medal of Honor. Married to Milena Kitic, an opera singer. Major Democratic supporter. Enjoys bicycling, skiing, tennis, swimming and art.
,Vita Reed
HOWARD G. PHANSTIEL
CEO, President
PacifiCare Health Systems Inc.
Born in New York, age 53
Lives in Westwood
Spent first full year as president, CEO of managed care company in a transition mode. Main goal: transform PacifiCare from HMO to what Phanstiel refers to as “diversified consumer health organization.”
Debuted new offerings, including an enhanced preferred provider organization, Medicare supplement insurance, Select Hospital plan that helps members avoid higher out-of-pocket costs by using selected hospitals.
Tapped Doner of Newport Beach to handle $20 million national advertising campaign, help enhance awareness of the company’s distinct brands, new consumer product offerings.
Also shed unprofitable membership, raised premium rates in 2001, reduced membership in PacifiCare’s Medicare+Choice HMO health plan, Secure Horizons. Said PacifiCare would focus on resuming commercial membership growth in various products, specialty businesses.
Prescription Solutions, company’s pharmacy benefit management unit, and PacifiCare Behavioral Health growing their unaffiliated membership, increasing profitability.
2001 revenue of $11.8 billion, up 2%. Company employs 7,600,3,700 in OC.
Unveiled “profit improvement and cost-saving” program in January. Reorganizing operating units, outsourcing some technology services. Cutting some 1,300 jobs companywide. Plans to move HQ from Santa Ana to Cypress, where California unit is based.
Wall Street reacted favorably to Phanstiel’s appointment, but earnings surprises,both good and bad,led some analysts to question ability to gauge where business is going.
Sports air of decisiveness. Joined PacifiCare in 2000 as executive vice president, chief financial officer. Previously, was chairman, CEO of ARV Assisted Living, Costa Mesa-based assisted-living company. Fought ARV takeover by Lazard Freres, sued by Lazard over annual meeting election. Also worked for WellPoint Health Networks as executive vice president of finance, information services. Also held various jobs with Prudential-Bache, Marine Midland, Sallie Mae, and Citibank.
Public-sector experience includes stint as managing director of the U.S. Health Care Financing Administration’s Office of Management and Budget.
Holds bachelor’s in political science from Syracuse University, master’s from Syracuse’s Maxwell School of Public Administration. Wife Louise, grown son, daughter. Enjoys golf.
,Vita Reed
DAVID E.I. PYOTT
CEO, President,
Allergan Inc.
Born in London, Oct. 13, 1953
Lives in Coto de Caza
A hero of plastic surgeons, Dorian Gray-wannabes, though they may not know it.
Company’s Botox, a cosmetic favorite, recently got federal nod for reducing wrinkles. Company’s a lot more than Botox, though: Pyott also a hero of Wall Street for growth, promising pipeline. Stock was star in 2000, pulled back last year to a P/E ratio more inline with other drug makers.
Continuing refinement of Allergan in fourth year on the job. Overseeing big expansion of Irvine campus with new R & D; labs. Rolled out new products, such as the Lumigan glaucoma medication.
In January, detailed plan to spin off ophthalmic surgical, contact lens businesses as Advanced Medical Optics. Expected to join Advanced Medical Optics’ board after spinoff due later this year.
Spent his first couple of years cutting costs, shifting resources to boost sales, marketing, R & D.;
Company’s product pipeline seen as bright spot.
Company is global maker, marketer of specialty drugs. Recently tapped Grey Global Group to handle a $50 million cosmetic Botox campaign, which will include television, print ads.
Allergan’s products also include Alphagan to treat glaucoma, Refresh Tears, a line of artificial tears, Tazorac skin medication.
Has 6,436 employees, 2,200 in OC. Last year, company posted earnings of $225 million on revenue of $1.7 billion. Sales up 7% from 2000.
Pyott joined Sandoz, later Novartis, in 1980. Spent 15 years in various positions with the company. Appointed head of Sandoz Nutrition Division in 1995, came to Allergan in 1998.
Extensive educational background: holds diploma in German and European law from the University of Amsterdam, master’s from the University of Edinburgh, MBA from the London Business School.
Raised in Scotland and India; fluent in four languages.
A married father of four, enjoys playing tennis.
,Vita Reed
RICHARD J. STATUTO
CEO, President,,
St. Joseph Health System
Born in Long Island, N.Y., June 10, 1957
Lives in Orange
Runs Orange-based health system made up of 15 hospitals,three in OC,home health agencies, physician practices, led provider backlash against HMOs locally.
Planning to spend some $160 million on Fullerton’s St. Jude Medical Center in the next six to seven years, expanding campus to meet demands for service, state earthquake standards, deal with changes in how healthcare is delivered.
Also worked on moving patients into the four “partner health plans” selected after widely publicized cutting down of HMO network. Move helping bottom line: “unique relationships resulted in improved financial performance and reduced risk, and created a model for future HMO contracting,” said in 2001 annual report.
Counts 19,150 workers, up from 18,959 a year earlier. Reported earnings of $30 million on revenue of $2.4 billion in fiscal 2001. Not-for-profit’s community benefit spending,or operating gains spent on clinics, health fairs,was $336.9 million in fiscal 2001, vs. $236.6 million a year earlier.
Came to St. Joseph in 1990 as vice president of planning, marketing and COO. Assumed current job in 1995. St. Joseph more than tripled size, expanded operations in its markets since Statuto took over.
Was corporate vice president at Bon Secours Health System in Maryland, senior management consultant at Touche Ross & Co. in Michigan, global marketing consultant for the Department of Commerce prior to coming to St. Joseph. Named Kmart director last year, voted to authorize bankruptcy.
Vice chairman of Christus Health, a Catholic health system based in Dallas. Belongs to the board of Catholic Health Association and board chairman of the Red Cross’ OC chapter.
Holds a bachelor’s in chemical engineering from Vanderbilt University, MBA from Xavier University.
Married to Jennifer; four sons, ages 12, 10, 8 and 5. Likes golf, tennis, family and community activities.
,Vita Reed
JOHN P. WAREHAM
Chairman, CEO, President,
Beckman Coulter Inc.
Born in Clinton, Iowa, Aug. 12, 1941
Lives in Orange
Quiet, dignified exec fine-tuning OC’s seminal medical technology company. Sees robotics, genetic analysis driving growth. Last year reworked company into three divisions: life science research, specialty testing, clinical diagnostics.
Company provides testing systems to hospitals, doctors, drug makers, universities. Wareham credited with successful melding of Beckman’s 1997 buy of Coulter Corp., which gave company scale, independent viability. Lightening the load: In November, detailed plan for $225 million note offering to pay down debt. Been cutting debt by $100 million annually for past few years.
Company enjoys strong reputation, global presence, long history in OC. Employs more than 10,000 people worldwide, 2,340 locally. 2001 revenue of $1.98 billion, up 5%. Good portion of sales from Europe, Asia, other global markets. More than 200,000 instrument systems in use worldwide.
Sees 2002 sales growing 7% to 8%, profit up 18% to 20%. Has key position to fill after retirement at year’s end of Albert Ziegler, clinical diagnostics president.
Company started in 1935 (founder Arnold Beckman set to turn 102 this year). Makes centrifuges, DNA and automation testing systems for body fluids, blood, cells, compounds.
Wareham, a pharmacist by education, spent 15 years with SmithKline as operations research analyst, several management positions, including president of Norden Laboratories. Joined Beckman in 1984 as vice president of the diagnostics group, promoted to president, chief operating officer in 1993. Named chief executive in 1998.
Bachelor’s in pharmacy from Creighton University in Omaha, Neb. MBA from Washington University in St. Louis. Past chairman, board member, Advanced Medical Technology Association. Board member, Steris, Manufacturers Alliance, National Association of Manufacturers.
On advisory board for the John Henry Foundation; member of the Center for Corporate Innovation in Los Angeles, UCI Chief Executive Roundtable, advisory council of the Keck Graduate Institute of Applied Life Sciences.
Wife Lois. Two grown children, three young grandchildren. Enjoys company of family. Likes art, golf. Traveled throughout the world with a fondness for the Far East.
, Vita Reed
