The Philpot family
By 1969, Tim had graduated second in his accounting class at the University of Georgia (UGA). Every one of the Big Eight accounting firms made him an offer, and he chose Peat Marwick Mitchell, known today as KPMG. This meant moving to Greenville, South Carolina.
Through personal loss and trials, Tim threw himself into work as he was just starting to build his career. He traveled constantly for the firm, but realized he needed something different. He called a former supervisor, Dale Cowan, someone he'd worked under at Peat Marwick and respected deeply.
"Dale, I decided to leave public accounting,” said Tim. “I'm on the road all the time. My home life is terrible. What do you recommend that I do?"
Dale recommended something unexpected.
"Well, Tim, I just had lunch with the Chief Financial Officer of Greenville Hospital System," said Dale.
Tim was skeptical.
"What would a CPA do in a hospital? I was born in one. I had my tonsils taken out in one. But, man, I don't see anything in hospitals that would be attractive," explained Tim.
"I don't know all there is to it, but why don't you call him, have lunch with him, and just find out," Dale replied.
The "him" was Bob Reeves. Tim took Dale’s advice and went to lunch with him. What Tim didn't know was that Greenville Hospital System (GHS) wasn't just a hospital, it was one of the very first integrated healthcare systems in America. Six hospitals, 1,000 beds, and a centralized corporate office overseeing it all. Revolutionary for the early 1970s.
Tim with JPS staff
Bob offered Tim a job. He tasked Tim to create the internal audit office for the hospital system. Tim started in 1972. About six months later, Bob came back to inform Tim that the head of accounts receivable had been let go. The department had about 30 employees and Bob wanted Tim to take charge. The last team Tim oversaw was comprised of six people.
Although initially, it was a new world for him, he took on the challenge. Promotions followed, and other companies were noticing the changes occurring at GHS. A new company out of Louisville, Kentucky, Humana, sent their management team to Greenville to study how the system worked. Spending most of their time with was Tim's boss, Carl Holden. About a year later, Carl was recruited to Humana's home office. And gave Tim's name to the Vice President running Humana's Dallas, Texas region.
"Hi, my name is Doug Smith. Your name was given to me by Carl Holden. I'd like to talk to you about a position we have available out here in Dallas," said Doug.
"You know, I live in Greenville, South Carolina today because I didn't want to be in a big city,” said Tim. “I had plenty of opportunities to be in Atlanta, Georgia. I just don't believe I want to live in a place like Dallas."
Doug didn't push him. "Tim, if you’ll spend the weekend at our expense, come out and visit with me, let's talk about the job. If you don't accept what we're offering, we'll part as good friends and move on."
Tim decided to visit, and ended up accepting the role. When he told his supervisor in Greenville, the man looked him square in the eye and said, "you're not ready for that job. You're probably going to fail." Tim never forgot that moment.
"I just decided right then and there. Not only do I have grit, but I'm going to be successful at what I do," he said.
Tim came to Texas in 1973. The Dallas regional office operated 13 hospitals with four more under construction. Including Tim, there were three people who managed all the hospitals. But turnover started hitting at the administration level at several hospitals. Soon, Tim became an interim administrator. First at a hospital in Bryan, Texas, for six months. Then, at another in Beaumont, Texas, for several months.
"I got a taste of being the head honcho in the hospital," said Tim. "And I decided that's what I wanted to be… a hospital administrator."
Almost universally across the country, you had to have a master's degree in healthcare administration to be a hospital CEO, but Tim only had his bachelor's in accounting. At that point in his life, he knew that sometimes all you need is the skill and the right opportunity. He had been transferred to Beaumont, helping open a new hospital there, when he got a call from a man named Gene.
Gene had done his one-year administrative internship years earlier at GHS and had previously worked on a project with Tim. Now Gene was the CEO of Tarrant County Hospital District in Fort Worth, Texas. The hospital was near bankruptcy, struggling operationally, and a complete mess. Gene needed help.
"'I've been reading about all that. That's a public hospital. I don't really think I want to get involved with that," said Tim to Gene.
Gene used the same tactic Doug Smith had. Come and see. Tim came up for the weekend. On the last evening, over dinner at the Hilton Hotel in downtown Fort Worth, Gene asked, "Tim, what would it take for you to come be a part of my team?" Tim took a paper napkin off the table, pulled it over in front of them, and drew out an org chart.
"Number one," he said, "I'm a CPA. If I have any relationship to the Office of the Controller, everybody will always view me as an accountant. That's not where I want to go. I want to be a CEO.”
So Tim listed all his requirements. The job Tim had just drawn encompassed about two-thirds of the organization. Gene agreed to all of it. About 14 months later, the board of directors had watched Tim work and offered him the role of Chief Executive Officer. He had just turned 30 years old when he became CEO of Tarrant County Hospital District.
The results followed. When Tim took the job, the hospital district's revenue base was about $16 or $17 million. Employment was a little over 900 people. Twenty years later, when he left, revenue was $300 million. Employment was roughly 5,000. In between, he built clinics, expanded the emergency service center, issued $50 million in bonds, grew the trauma center, and turned a struggling public hospital into a cornerstone of the community.
And then, at around age 50, the board told him they desired to move in a different direction.
Next in the series: How Tim and David founded Preservation Financial