PacifiCare Chief Key Player in Field of Managed Care

With Monday’s unveiling of a merger that will make PacifiCare Health Systems one of the premier players in the managed care industry, Alan Hoops can finally say he made it to the big leagues--just not the way he thought he would.

The former UCLA baseball standout dreamed of a pitching career in the major leagues, and even played a couple of seasons with the West Palm Beach Expos before hanging up the glove to pursue a master’s degree in health administration.

Over the hill in his early 20s on the mound, Hoops became something of a prodigy in the fledgling HMO field by his early 30s. Now at the ripe old age of 48, the Long Beach native is one of the most experienced and respected executives in the hardball field of managed care.

“When I realized I wasn’t going to be Sandy Koufax, I changed careers,” Hoops said. “. . . I wanted to participate in something where I could exert some real influence. But quite honestly, I don’t think anyone could have envisioned what HMOs and managed care would become.”

What they have become is the fastest-growing segment of the health-care industry, as players bulk up in size to get control over costs and gain clout with health-care providers and subscribers alike. While the brunt of that cost-cutting pressure has fallen on doctors and hospitals in some managed care systems, analysts give Hoops high marks for putting patients and quality first.

“He’s one of the best strategic thinkers in the business,” Dean Witter analyst Todd Richter said. “He has always understood that for an HMO to do well, it has to be well regarded by its patients, doctors and hospitals. While other companies are beating up on their doctors, Alan has found a way to walk a middle line.”

Colleagues say that balance can be found in Hoops’ management style, which combines intense competitiveness with a quiet, steady and even playful nature.

Terry Hartshorn, founder and chairman of PacifiCare, said Hoops can be direct, even blunt when dispensing criticism, a quality that has made employees uncomfortable at times. He’s also the first to remember a spouse’s name, solicit the opinions of the rank and file, and don rabbit ears or a Star Trek costume to liven up the company party.

“He’s a quiet guy who does crazy things,” Hartshorn said. “He doesn’t flaunt his position like some executives do. He’s very approachable, and has a very human and soft side.”

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Hartshorn founded PacifiCare in 1975 as a segment of the nonprofit Lutheran Hospital Society. Barely 30 years old at the time, Hartshorn decided to surround himself with other young adventurers as he set out to explore the new field of managed care.

He remembered being impressed by his brother’s college roommate, a baseball player named Hoops, who had gotten a psychology degree at UCLA and gone on to garner a graduate degree in health administration from Washington University.

“I had a theory that competitive athletes make good managers,” Hartshorn said. “Turns out I was right.”

Hartshorn said Hoops’ analytical skills and big-picture thinking made him a natural for the fast-changing managed care business. Hoops moved quickly through the organization, mastering positions in marketing, planning and operations before being named president and chief executive officer in 1993.

“He was good at everything we gave him,” Hartshorn said. “It became evident very quickly that if I got hit by a truck he should be the one to step in. He was clearly the best member of the management team.”

Some industry watchers say Hoops is so analytical and deliberative that the company hasn’t grown as fast as it should have. But analyst Richter says Hoops’ steady style has served PacifiCare well in the mercurial managed care industry.

“He isn’t a shoot-from-the-hip kind of gunslinger,” Richter says. “He does his homework and research, that’s why he doesn’t make big mistakes like others have.”

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Raised in Long Beach, Hoops attended Woodrow Wilson High School before pitching his way into UCLA. He now resides in Irvine with his wife and two teenage sons.

Hoops is chairman of the board of the Irvine Medical Center, and a board member of the Mardan Center of Educational Therapy in Irvine, a school for children with learning disabilities and behavioral problems. He is a member of the Adaptive Business Leaders and the Young Presidents Organization, a elite club of executive prodigies who made their mark on corporate America before age 40.

Hoops never thought it would turn out this way, and credits some of his success to being in the right industry at the right time.

“I had planned on being a professional baseball player,” he said.

“I don’t want to give the impression that I had this all figured out.”