After a nearly year-long search, the board of Cleveland's MetroHealth System named Dr. John Brennan, the chief executive at Newark Beth Israel Medical Center in New Jersey, as its next president and CEO.
Brennan, a native of Syracuse, N.Y. and expert in emergency medicine, will replace Mark Moran, who joined the system in 2008 and last winter announced his plans to step down once a successor was named. Brennan will begin his new role Jan. 1.
Brennan will earn an annual salary of $685,000— $135,000 more than his predecessor. The value of Brennan's total compensation package will hover between $750,000 and $1.1 million.
Since 2007, Brennan has steered Beth Israel and its children's hospital, an enterprise with an annual budget totaling about $545 million. Like Brennan's new employer, Beth Israel in recent years has faced significant financial hardships due to its role as a safety-net health care provider that cares for a large number of uninsured patients.
Brennan has been credited with Beth Israel's financial turnaround; the hospital stomached $36 million in operating losses in 2008 but posted $28 million in operating income last year. He did so by growing clinical programs and expanding the hospital's ambulatory, or outpatient, network — an effort MetroHealth also has in the works with the construction of a new health center in Middleburg Heights and three others in the pipeline.
“There are a lot of similarities in terms of facilities, the community and challenges we have and what John has faced,” said MetroHealth board chairman Ronald Fountain in a meeting Wednesday afternoon with Crain's.
MetroHealth, an organization with operating revenues totaling upward of $800 million, has seen its finances battered in recent years due to the 35% increase in uncompensated care since 2008 at the Cuyahoga County-subsidized health system. Those financial problems resulted in layoffs and steep budget cuts.
In addition to expanding access to the health system, a driving force behind MetroHealth's efforts to expand its ambulatory network has been to prop up its finances. The outpatient centers are expected to bring more commercially insured patients — and thus revenue — into MetroHealth's coffers in order to help offset the growing debt the system takes on by caring for the county's poorest residents.
During an interview with Crain's, Brennan appeared to be on board in large part with MetroHealth's ambulatory expansion strategy designed under Mr. Moran's watch as well as with the system's ambitious goal of spending as much as $650 million by 2017 to upgrade its aging main campus on West 25th Street in Cleveland. System officials said in the past it would cost $435 million over the next five years to maintain its current facilities.
“MetroHealth has put a strategy together that aligns with where health care reform is going in this country,” Brennan said.
One of Brennan's immediate tasks upon arrival will be implementing MetroHealth's Medicaid waiver program. The waiver is a complicated legal maneuver conceptualized late last year that, with federal approval, immediately would expand Medicaid coverage in Cuyahoga County and thus reduce the amount of uncompensated care incurred by the health system. Because MetroHealth is a public entity, it could use its annual $36 million county subsidy to draw about $64 million in additional federal matching funds to finance the expansion of coverage.
MetroHealth officials said federal regulators are expected to sign off on the waiver shortly and could begin enrolling patients as soon as Dec. 1.
Longer term, Brennan said one way MetroHealth and the other local health systems can strengthen their books is by improving the overall health of the county's residents. Brennan said by improving the care for all, fewer people with preventable conditions, such as obesity, will require costly health care services.
“If there was a way we could all reduce expenses, it takes that competitive edge away,” he said.
Brennan, who is married with three children, was one of 40 candidates offered up to the search committee by its search firm, Witt Kiefer. He was a leading candidate during much of the private, year-long search process, according to Tom McDonald, the search committee's chairman and a member of the MetroHealth board.
Brennan received his medical degree from Georgetown University in Washington, D.C., and received his master's degree in public health from Columbia University in New York City. Prior to his role leading Beth Israel, he served as senior vice president for clinical and emergency services for Barnabas Health, Beth Israel's parent health system.