UPDATE 1-Hospital operator HCA says Bracken to retire as CEO

Mon Jul 29, 2013 6:27pm EDT

* CFO R. Milton Johnson named to the CEO role

* Company conducting internal search for new CFO

* Shares little changed after hours

By Susan Kelly

July 29 (Reuters) - HCA Holdings Inc, the largest for-profit U.S. hospital operator, on Monday said Richard Bracken would step down as chief executive by year-end and would be replaced by R. Milton Johnson, who is currently chief financial officer.

Bracken, 60, who joined HCA in 1981, will remain chairman of HCA's board. He was named chairman and CEO in 2009, after serving as president and chief operating officer of the Nashville, Tennessee-based company.

HCA said it was conducting an internal search for a CFO to succeed Johnson, a 31-year veteran of the company who was named a board director in 2009. HCA said it would make an announcement in the coming months.

UBS Investment Research analyst A.J. Rice said during Bracken's tenure as a senior manager, the company enjoyed substantial operating success, posting the strongest patient volumes in the industry.

"In our view, the retirement is no reflection on near term operating trends," Rice said in a note to clients.

HCA earlier this month reported an increase in patient admissions to its hospitals in the second quarter, bucking the general industry trend of declining volumes as people stay away from the doctor due to lack of insurance or higher out-of-pocket expenses.

Under Bracken's leadership, HCA improved the quality of care at its hospitals and is now poised to reap the benefits of President Barack Obama's healthcare overhaul, said Sheryl Skolnick, an analyst with CRT Capital Group.

"He's retiring on the heels of a strong quarter and on the brink of significant potential earnings expansion from reform, a time that seems fitting," Skolnick said.

Hospitals are expected to benefit from an influx of newly insured patients under the health reform law, starting next year.

Johnson is a capable, seasoned executive ready to step into the role of CEO, Skolnick said.

HCA shares were little changed in after-hours trading from a close Monday of $39.05.

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