KentuckyOne Health CEO's resignation latest in trend among pressured providers

Dive Brief:

  • Ruth Brinkley has resigned as KentuckyOne Health CEO, according to a report from Modern Healthcare.
  • The news comes a week after the system announced plans to trim operations in the Louisville area and focus on the central and eastern Kentucky region.
  • Chuck Neumann has been named as Brinkley's successor and will start as CEO on July 14. Brinkley will continue to work at KentuckyOne until September to support the transition.

Dive Insight:

Healthcare executive shake-ups continue to define this year.   

Earlier this month, Cleveland Clinic CEO Toby Cosgrove announced he'll be stepping down later this year. Cosgrove's announcement came days after University of Utah Health Care CEO Vivian Lee announced her resignation.

Elsewhere, Ronald DePinho stepped down as MD Anderson Cancer Center's president in March while Summa Health's CEO Thomas Malone resigned in January.

Though there have been several notable resignations this year, the reasons differ for each. Lee came under pressure after firing the Huntsman Cancer Institute director and for potential ties to a questionable $12 million donation from NantHealth CEO Patrick Soon-Shiong. Malone received a vote of no confidence from more than 240 Summa physicians.

The pressures of keeping a system profitable seem to play a key role in the decision to step down for Cosgrove, DePinho and Brinkley. Their actions serve to underscore the difficulties that provider administrators currently face.

In March, bondholder documents revealed Cleveland Clinic's operating income fell by 71% although the system was reported to still be turning a profit. MD Anderson suffered a $266 million loss in fiscal year 2016 before losing another $67 million in the first two months of fiscal year 2017, citing an increase in expenses and a decrease in patient revenues that drove losses. And late last year, Ramanathan Raju faced a potential $6 billion fiscal deficit through 2020 when he stepped down as NYC Health + Hospitals CEO.

Overall, hospitals are experiencing a decline in admissions and increase in high-cost patients, in addition to rising expense costs. These levers work in tandem to make it difficult for providers to generate profits, especially if those providers lack a majority of a regional market share.

"Business is challenging right now and many systems are stressed and many, like we are, are really paying attention to how we run our business, maybe in a way like we've never done before," Intermountain CEO Marc Harrison told Healthcare Dive last month. "But we need to keep talking about the patients and the fact that the relationship between a patient and their provider is a sacred one that deserves enormous respect."

In Brinkley's case, KentuckyOne found itself needing to pull out of the highly competitive Louisville market in attempt to stave off spending costs. The provider plans to sell the 462-bed Jewish Hospital, as well as Frazier Rehab Institute, Sts. Mary & Elizabeth Hospital, Medical Centers Jewish East, South, Southwest and Northeast, Jewish Hospital Shelbyville, Saint Joseph Martin and KentuckyOne Health Medical Group provider practices in Louisville and Martin, KY.

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Filed Under: Finance Hospital Administration
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