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We are pleased to share this Q&A featuring Dr. Prem Reddy and Prime Healthcare and the Managing Director of the Advisory Board. The Advisory Board is a prestigious healthcare advisory organization located on three continents, and its Daily Briefing is distributed to more than 200,000 healthcare leaders throughout the United States and abroad. Please feel free to share Dr. Reddy’s feature article with others in your organization and community. The beginning of the interview is posted below.

You see a failing hospital. CEO Prem Reddy sees an opportunity.

Lessons from the C-Suite: Prem Reddy, Chair, President, and CEO of Prime Healthcare

by Eric Larsen, Managing Partner

Welcome to the “Lessons from the C-suite” series, featuring Managing Partner Eric Larsen’s conversations with the most influential leaders in health care.

In this edition, Prem Reddy, chair, president, and CEO of Prime Healthcare, tells Eric about his system’s approach to working with health plans, how he became known as a turnaround expert, and why leadership is in his DNA.


Q: Dr. Reddy, you have 43 hospitals in 14 states and 43,000 employees. Prime is the fastest-growing healthcare system in the country, as Modern Healthcare pointed out last year and the fifth largest for-profit system by hospital count. You’ve taken bets on acquiring distressed and bankrupt hospitals that others have passed over. How have you made these acquisitions work?

Prem Reddy: My experience with Desert Valley, the hospital I built, gave me a level of confidence that I could turn around a failing hospital. Desert Valley was sold, along with my physician practice management (PPM) company, to PhyCor. PhyCor declared bankruptcy soon after that. At the time, I was very disappointed with myself. This was my only experience building a hospital from the ground up, and I felt that I had failed.

In December 2000, the doctors at Desert Valley called to ask me to come back. I pooled all my money and borrowed money and bought it back. From 2001 to 2003, I worked as a physician, a medical director, and a cardiologist. It was a mess at that time, but Desert Valley eventually did extremely well.

Later, a group of doctors 30 miles away bought a hospital when it was in distress, and then it failed and went into bankruptcy. They asked me to purchase the hospital through bankruptcy and turn it around. And then a third hospital in bankruptcy came to me. That’s how I became a turnaround expert in hospitals.

Now, we get at least a few calls a week. We can’t help everyone but concentrate on those we can help.

Read the full article here.