BUSINESS NEWS
Humana founder, Louisville titan David Jones Sr. dies
Andrew Wolfson
Louisville Courier Journal
Published 10:58 AM EDT Sep 18, 2019
David A. Jones Sr., a Golden Gloves boxer who borrowed $1,000 to help found what became the nation’s largest nursing home chain, then transformed it into a health insurance colossus worth $39 billion, died Wednesday morning. He was 88.
Jones, who was CEO of Humana Inc. for 37 years and its board chairman for 44 before retiring in 2007, was once described by U.S. Sen. Mitch McConnell as the most influential person in Louisville. Mayor Jerry Abramson said “there are very few communitywide success stories that don’t bear the stamp of David Jones.” And his protégé, banker and investor J. David Grissom, called him “the finest human being I have ever known.”
“This is a sad day for me personally, and for the Humana team,” Humana President and CEO Bruce Broussard said in a statement. “In his extraordinary lifetime, David changed the lives of so many people.”
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When David Jones “started out, he didn’t have two dimes to rub together,” Grissom said in a 2018 interview. “He was an American success story. The possibility of failure was never in his lexicon.”
Telling the story of his company’s success, Jones was more humble in describing himself and Humana co-founder Wendell Cherry.
“Each of the businesses we’ve been in – nursing homes, hospitals, insurance … all of those were something we knew absolutely nothing about,” he said during an appearance in 2015 before a a group of young entrepreneurs. “We went into each of them with confidence of total ignorance.”
At its peak, Humana owned more than 100 hospitals in the U.S., Canada, Mexico, Spain and Switzerland, and employed 45,000 people. Unlike some competitors, it remained highly centralized, achieving huge efficiencies by operating all patient billing and data collection out of its home office in Louisville.
“We measured everything,” Jones said.
Jones was born on Aug. 7 1931, in a Depression-battered home in Louisville, one of six children of Logan and Elsie Jones. His father was a contractor who did small repairs and was unemployed from 1938 to 1941. His mother was a teacher who worked nights at a laundry.
After a three-year hitch in the Navy, where he was a supply clerk, Jones worked his way through Yale Law School by teaching accounting at nearby Quinnipiac College.
He joined a rising law firm known today as Wyatt Tarrant & Combs, where he met Cherry, who had grown up in Horse Cave, the son of a wholesale grocer. And that is where Humana’s “creation story,” as Jones like to call it, began.
In 1968, they took their nursing home company – which they’d dubbed Extendicare – public, at $8 a share. By year’s end, it was selling for $80.
With 50 nursing homes in the U.S. and another 10 in Canada, by 1969, Extendicare was the largest nursing home company in North America. But so many companies had hopped onto the nursing bandwagon that the market became glutted.
In 1972, they sold their remaining 41 nursing homes and bought their first hospital, in Huntsville, Alabama. In 1974, they changed the company name to Humana, one of 500 alternatives proposed by a New York corporate identity consultant. And in 1978, they catapulted themselves in to the big time, winning a hostile bid for a Pennsylvania chain that increased their inventory of hospitals from 59 to 114 overnight.
The next year, revenue for the first time topped $1 billion, and Humana broke into the ranks of the Fortune 500 as one America’s largest companies.
In the mid-1980s, seeing it was losing business to HMOs – health maintenance organizations – that were steering patients to other hospitals, Humana jumped into that business itself. It sold 600,000 policies the first year, in 1986, and while it lost $150 million that year, the move set the stage for the company’s third incarnation – as an insurance business.
Describing his own leadership skills, he was modest.
“I never came up with an original idea,” he said, “but I had the power to observe and figure out how to do it better.”
Reach Andrew Wolfson at 502-582-7189 or awolfson@courier-journal.com; Twitter: @adwolfson. Support strong local journalism by subscribing today: www.courier-journal.com/andreww
