HUM Humana Inc

By James R. Hagerty 

David A. Jones and another Louisville, Ky., lawyer, Wendell Cherry, were looking to make a little money on the side in 1961 when they decided to open a nursing home. That Louisville home -- touted as "the newest and finest geriatric care center in the nation" -- turned into a chain called Extendicare and evolved into today's Humana Inc.

In the late 1960s, the company went public and diversified into hospitals. By the early 1970s, it was getting out of the crowded nursing-home business to focus on building a national chain of hospitals.

Mr. Jones, who died Wednesday at age 88, was an amateur boxer in his youth. In business, he retained an aggressive style. He devised bold strategies -- and was willing to ditch them as the politics and economics of the health-care market changed.

"We don't know what's out there to bite us next," he told The Wall Street Journal in 1987.

In the mid-1980s, he turned Humana into a health insurer, partly as a way of channeling patients into its own hospitals. With Humana's profit margins and share price falling, Mr. Jones decided in 1992 to spin off the hospitals and focus on insurance. The company today is the second-largest provider of Medicare Advantage insurance plans.

Mr. Jones stepped down as CEO at the end of 1997. His successor, Gregory Wolf, agreed to sell Humana to United HealthCare Corp. in 1998, but that deal -- opposed by Mr. Jones -- fell through when United's stock price plunged. Mr. Jones returned briefly as interim CEO in 1999 and remained chairman until he retired in 2005.

A spokesman said he died of complications from multiple myeloma.

Some of his businesses flopped, including forays into hardware wholesaling and mobile-home parks. Each business he entered was "something we knew absolutely nothing about," he told young entrepreneurs in 2015, according to the Louisville Courier-Journal. "We went into each of them with confidence of total ignorance."

With Humana, however, he built a business whose stock market value is now around $37 billion.

David Allen Jones, one of six children, was born Aug. 7, 1931, in Louisville. His father scraped by with odd jobs during the Depression. His mother was a clerk for the Census Bureau.

Mr. Jones earned an accounting degree at the University of Louisville in 1954 and served in the Navy before enrolling in law school at Yale University, graduating in 1960.

Humana's 27-story pink granite headquarters -- sometimes dubbed "the pink cash register" -- is a landmark in Louisville. In the 1980s, the company was criticized for its billing, notably when it marked up crutches from about $8 to $100. Mr. Jones said high markups on some items were needed to offset discounts on others. He also argued Humana was a scapegoat because of its prominence.

In 1984, Humana announced plans to make Louisville a center for surgery to implant artificial hearts developed by Robert Jarvik. "It's realistic to suppose and hope that if this goes well, people will consider Louisville and Humana along with other eminent centers for the treatment of heart disease," Mr. Jones said at the time.

The implants proved controversial, however, and the Food and Drug Administration withdrew approval of them in 1990.

A fierce defender of his industry, Mr. Jones regularly denounced proposals to nationalize health care. He cited "Canada's chronic waiting lists for essential medical procedures."

At the request of President George H.W. Bush, Mr. Jones in 1990 began leading programs to provide advice and medical expertise to health authorities in Romania.

Mr. Jones is survived by five children and 11 grandchildren. His son David Jones Jr. is a director of Humana. His wife, Betty, died in August.

He was a stickler for brevity. "if you can't write your idea on the back of a business card," he said, "it's not a good idea."

Write to James R. Hagerty at bob.hagerty@wsj.com

(END) Dow Jones Newswires

September 19, 2019 12:22 ET (16:22 GMT)

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