No one in Louisville is neutral on the subject of Humana Inc. The very name provokes sputtering outbursts of ire or rhapsodic psalms of endorsement.
In a city once known best for fast horses, smooth bourbon and baseball bats, the huge for-profit hospital chain that carried out the world's second mechanical-heart implant Nov. 25 now dominates the town's palaver as surely as its new headquarters dominate the skyline.
Like the company it has come to symbolize, that new building -- embellished with pink granite, gold leaf, bronze doors and a 50-foot waterfall -- is controversial, massive and impossible to ignore as it looms over the nearby Ohio River. It is a 27-story monument to corporate panache.
"The company's philosophy toward their competitors is, 'We'll run over them, or through them, or around them.' It's almost a Vince Lombardi thing," said Richard M. Abell, administrator of St. Anthony Hospital, an 85-year-old non-Humana institution. "It's almost like they want to own the city. I liken it to the old coal-mining company towns."
Another hospital administrator, who asked for anonymity, added, "They own this town. That's not hyperbole. They own it. And when the former governor was in office, John Y. Brown, they owned the state . . . . I'm scared of them, and I don't mind telling you. And I run scared all the time."
But Marlow G. Burt, director of the Kentucky Center for the Arts, rebutted those claims, saying, "I wish more corporations who had the capacity to do what Humana has done would be as dynamic, would be out front, would take risks. Then we could get more done."
Two months ago, Humana was largely unknown outside medical circles, despite the chain's 87 for-profit hospitals in 21 states and three other countries. Then came the artificial heart implant for William J. Schroeder last November at Humana Hospital-Audubon, the chain's flagship here, with enough attendant publicity, in the words of one hospital executive, "to make Humana a household word in 60 days."
But in Louisville, the corporation has had a large and growing presence for years, in part because of its generous support of the arts and civic enterprises, and in part because Humana controls four of the city's 11 hospitals. "If you're not part of their organization, you're threatened," a physician said. "I've heard wives shushing their husbands at cocktail parties" when they started to criticize Humana.
"I think that's a little heavy," Mayor Harvey I. Sloane, a physician, said of the assertion that Louisville has become a company town. "They don't tell me how to run the city. I don't feel that they have a lock on this community. They're extremely aggressive, but they're not the only show in town."
The caricature of a vindictive, avaricious corporate beast annoys and exasperates the two local boys who 23 years ago began to parlay their ownership of one nursing home into a company that last year grossed $2.6 billion, with $193 million in profits.
"We've done nothing we should ever apologize for," said Wendell Cherry, Humana's president, a 49-year-old lawyer and native of Horse Cave, Ky., who raised his initial $1,000 investment in the company by floating a second mortgage on his 1960 Valiant.
Some of Cherry's prodigious energy is channeled into support for this town's lively arts community. In addition to donating $1 million to the new arts center and pushing the stalled project to completion, his first financial backing of a Broadway play turned to gold when he selected " 'night, Mother" by former Louisvillian Marsha Norman, who subsequently won a Pulitzer Prize for the drama.
Cherry once told a reporter that collecting fine art was better than "sitting around the DX service station playing checkers under a tree."
The other half of the Humana brain trust is David A. Jones, 53, the company's chairman, who borrowed his initial $1,000 investment from the Household Finance Corp. A Louisville native, lawyer and one-time Golden Gloves boxer, Jones characteristically waves aside talk of the arts -- "I don't know anything about that" -- thus reinforcing the bromide that he and Cherry are a perfectly mismatched pair.
"They're very different, Mr. Inside and Mr. Outside. But working together, they're perfect," one local observer said.
Jones recently unloaded his substantial interests in the R.C. Cola Co. to buy Belknap Inc., a 143-year-old hardware company perched on the Ohio. Supporters see the investment as a harbinger of development along the city's dowdy riverfront; detractors see another example of what some call "Humana Louisville Inc." (Abell, the St. Anthony administrator, chuckled, "The joke is that if you go to a Humana hospital, with every surgical procedure you get a free circular saw.")
When asked what it meant to him to succeed in the town where he grew up with modest means on the wrong side of the tracks, Jones said, "It's a big hassle . . . . I never set out to be a corporate mogul. I guess what I wanted was independence. I achieved financial independence, but when you take on responsibility, independence is hard to preserve.
"A company can get too big for a community; that causes anxiety," Jones added.
When it was observed that his new building looks distinctly unportable if he decided to relocate Humana's headquarters, Jones said he has no intention of moving but noted dryly that the building cost only one month's pretax profits, and "if we decided to leave the city . . . , wouldn't be any anchor at all."
Although not the largest for-profit hospital chain in the country, Humana probably has the highest profile and may be the most innovative. It sits on the cutting edge of an upheaval in the health-care industry; 12 percent of all U.S. hospitals are run by for-profit companies, with predictions that the figure will climb to 20 percent in a few years.
Consequently, the company seems to have a knack for attracting controversy. American Medical Association President Joseph Boyle, speaking in Hawaii recently, criticized the ballyhoo surrounding the Schroeder heart implant as "a Roman circus." Cherry's reply: "He didn't know a thing about the program . . . . Maybe he'd drunk too much Hawaiian Punch."
The company also has swapped salvos with Dr. Arnold Relman, influential editor of the New England Journal of Medicine and a relentless critic of the for-profit hospital phenomenon. Said Jones: "Dr. Relman uses information selectively."
Locally, Humana has not been shy about counterpunching against The Louisville Courier-Journal for what Jones contends is the newspaper's "viewpoint that there's something wrong" with a for-profit hospital corporation.
(Jones habitually prefers "tax-paying" rather than "for-profit" in discussing his hospitals, although observers say he has stopped referring to "customers," in favor of the more traditional "patients.")
After a report appeared last October on Humana's takeover of the city's University Hospital, Jones and Cherry appeared together at the newspaper for an acrimonious session full of "raised voices and finger-wagging," according to Paul Janensch, The Courier-Journal's acting editor and publisher.
"From time to time, they are very thin-skinned," said Janensch, who denied a bias against for-profit hospitals. "They see any reference that's unflattering as a personal insult. I think their nerve endings have been rubbed raw. There are people in the medical field who are constantly critical of them . . . , and I think they're sick of it."
Jones, who noted that the newspaper subsequently clarified several points in the October report, replied, "I'm the chief executive officer and the visible symbol and the moral leader of this company, and it is personal."
But it is in Louisville's medical community that the pros and cons of Humana are batted about most intensely.
"Fifteen years ago, there were no Humana hospitals in Louisville, and now all the best hospitals are," Jones said. He added, "What we're talking about here is change, turf battles, not whether or not we pay taxes."
And, Cherry said, "I wouldn't be surprised to see two or three less hospitals here . . . in five years."
Such direct self-assurance is viewed as infuriating arrogance by Humana's competitors. Clearly, however, many are frightened by the company's tactics. In September 1983, for example, Humana unveiled a kind of insurance program called Humana Care Plus, which now has more than 100,000 members and is said to be growing at a rate of 3,000 a week.
Although many participants find the premiums attractive, there are stiff disincentives for members seeking treatment at non-Humana hospitals, such as a $500 deductible in some cases, according to some hospital officials. In Louisville, several nonprofit hospitals are canceling contracts with vendors who have joined Care Plus.
"It's cutthroat. I don't like it. But what alternative do I have?" St. Anthony's Abell said.
Another measure of the intensity of competition can be seen in a soon-to-be-unveiled newspaper ad Abell carries in his wallet. It depicts a beatific, haloed St. Anthony facing a businessman in a three-piece suit. The text says of St. Anthony Hospital, "They never sought a profit, only the opportunity to be of service . . . . It's one of those differences that always separates saints and profits."
Replied Jones, with a grin, "I never wear three-piece suits."
Louisville also entertains some brisk competition between egos in the medical community, and there appears to be a kind of one-upsmanship at play among the hospitals.
A surgical team at Jewish Hospital last year performed Kentucky's first heart transplant, narrowly edging out Humana's Audubon for the honor; the two hospitals combined have done eight transplants in recent months, as they vie for prestige and income provided by heart surgery.
Dr. Allan M. Lansing, spokesman for the artificial-heart team, told The Courier-Journal last month, "I'm not the best heart surgeon in the world, but I do think I'm probably the best in this region," including Dr. William C. DeVries, who performed the implant. Lansing said DeVries "may not understand as yet how much I accomplished and how much I did for him."
Among other innovations, Humana's control of the city's indigent-heavy University Hospital has raised eyebrows because it includes an unprecedented marriage between a corporation and the University of Louisville Medical School.
"It's new, it's untried and, needless to say, we had concerns. We still have concerns," said Dr. Donald R. Kmetz, dean of the medical school. "But I feel it has done some very positive things for the school of medicine."
Furthermore, Humana officials add, a hospital that had been hemorrhaging money turned a $1 million profit in its first 16 months of operation, and no impoverished patients needing hospitalization were, or will be, turned away.
"We solved a tremendously pressing problem that none of the other hospitals would solve and I think they're a little embarrassed," Cherry said.
As to the new headquarters building which has become a metaphor for Humana -- detractors allude to the indoor waterfall when they call the building the "Pink Privy" -- Jones shrugged.
"People love it. People hate it. But we didn't just go out and throw up a stack of bricks . . . . We do things in a little different way that challenges others. I'd like to see whoever builds the next one in town try to build a better one."
One physician added, "There is no giant villain here, no giant hero either."