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MetroHealth CEO-designate Dr John Brennan
Brennan

MetroHealth CEO-designate Dr. John Brennan backs out of job


By Timothy Magaw, Crain's Cleveland Business
Posted: November 29, 2012 - 1:00 pm ET
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Dr. John Brennan won't be coming to Cleveland, after all, to serve as president and CEO of the MetroHealth System.

Instead, Dr. Brennan will remain president and CEO of Newark Beth Israel Medical Center and the Children's Hospital of New Jersey, according to a spokeswoman for the hospitals' parent system, Barnabas Health. She would not comment further on the announcement, noting that it was a personal decision.

MetroHealth officials expressed disappointment in Dr. Brennan's decision, which comes only two weeks after he was unveiled as the next leader of the hard-pressed health system subsidized by Cuyahoga County.

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“The biggest impact is on our timetable, because we spent several months working out the details of his contract,” said Tom McDonald, a MetroHealth trustee and chairman of the search committee. “However, he assured us his decision has absolutely nothing to do with MetroHealth. Our offer was extremely competitive and met his requests.”

Dr. Brennan was poised to earn an annual salary of $685,000 — $135,000 more than his would-be predecessor, Mark Moran. The value of Dr. Brennan's total compensation package would have hovered between $750,000 and $1.1 million.

MetroHealth board chairman Ronald Fountain said in a statement trustees will meet soon to consider its options to fill the position. The statement didn't indicate whether Mr. Moran would remain on board as the health system's president and CEO.

“MetroHealth has been here for our community for 175 years and we appreciate the commitment of the physicians, nurses and administrative staff who do an excellent job each day, providing high-quality, affordable care to the people of Cuyahoga County,” Dr. Fountain said in the statement.

MetroHealth launched the search for its next CEO earlier this year after Mr. Moran said in December 2011 he would step down once his successor was named.

Big job ahead

Mr. Moran's successor will be tasked with righting a ship that has encountered its fair share of obstacles in recent years. For one, MetroHealth, an organization with operating revenues of about $800 million, has seen its finances battered in recent years due to the 35% increase in uncompensated care since 2008. Those financial pressures resulted in layoffs and steep budget cuts.

MetroHealth officials had been impressed with Dr. Brennan's financial prowess, crediting him with Beth Israel's financial turnaround. Beth Israel had stomached $36 million in operating losses in 2008 but posted $28 million in operating income last year. Dr. Brennan was able to do so by growing clinical programs and expanding the hospital's ambulatory, or outpatient, network.

Like Beth Israel, MetroHealth has an ambitious ambulatory strategy in the works with the construction of a new health center in Middleburg Heights and three others in the pipeline. In a meeting with Crain's earlier this month, Dr. Brennan appeared on board with those plans, saying “MetroHealth has put a strategy together that aligns with where health care reform is going in this country,”

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 the health system's coffers in order to offset the growing debt the system takes on by caring for the county's poorest residents.

The next CEO also will be charged with implementing MetroHealth's Medicaid waiver program. The waiver is a complicated legal maneuver 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 hospital, it could use its annual $36 million county subsidy to draw about $64 million in additional federal matching funds to pay for the expansion of coverage.


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