Lutheran Health exec resigns over alleged CHS mismanagement
- In a resignation letter, Lutheran Hospital CMIO Dr. Steven Orlow blasted parent company Community Health Systems for mismanaging the Lutheran Health Network and reinvesting “too little in the LHN market,” WANE.com reported.
- Orlow blamed the negative work environment for high staff turnover, saying two chief information officers, two chief technology officers, one chief nursing informatics officer, one chief medical officer and numerous other employees had resigned during his tenure.
- He also disputed CHS’ claim that Fort Wayne Physicians, a 10-member practice that attempted to buy LHN, voluntarily disbanded, saying the “Brave 10” dissolved after CHS threatened them with a lawsuit. He credits the group with getting CHS to agree to invest $500 million in LHN by exposing a rash of concerns involving personnel, equipment and other issues at LHN facilities.
Orlow’s resignation comes less than a month after CHS fired Luther Health Network CEO Brian Bauer. At the time, LHN President of Operations Marty Bonick told WANE.com that “current circumstances put him in an untenable position and he is unable to continue in his leadership role." The dismissal followed CHS’ rejection of the physician-led $2.4 billion buyout offer to acquire much of LHN. CHS maintained the offer was at least $1 billion short of the network’s worth.
LHN accounts for about 15-20% of CHS’ annual EBIDTA, or about $350 million, according to a J.P. Morgan analyst.
While it nixed the sale to the physician group, CHS has been divesting other hospitals. The large for-profit hospital system recently announced it would sell five Pennsylvania hospitals to Reading Health System.
The sales are part of CHS’ plan to divest more than two dozen hospitals this year to bring down nearly $15 billion in debt. The health system posted a $1.7 billion loss for 2016. However, during an earnings call in May, CEO Wayne Smith said hospital divestitures will be less of a focus going forward.
- Becker's Hospital Review Lutheran Health executive resigns, claims CHS forced physician group to disband
- wane.com Lutheran administrator submits scathing letter to interim CEO