Patrick G. Hays, who as president and chief executive officer of Sacramento, Calif.-based Sutter Health since 1980 was the chief architect of the system's growth, has resigned.
Although Sutter's recent expansion binge has strained the system, speculation that this caused Mr. Hays' departure is inaccurate, said Steve Heath, Sutter's vice president of communications.
Among other moves to develop as an integrated delivery system, not-for-profit Sutter paid nearly $5.5 million in June 1992 to acquire 50% of Stockton, Calif.-based Omni Health Plan. Tripling its enrollment since then, for-profit Omni posted a $1.1 million net loss in 1993 on revenues of $87.4 million. In 1992, it lost nearly $2 million on total revenues of $47.3 million. It had a $400,000 profit on revenues of $60 million in the first half of 1994.
Mr. Hays, 52, said in a statement, "In recent years I've frequently commented, half in jest, that perhaps I have been here long enough to become part of the problem rather than part of the solution. A major reason for my decision is what I perceive to be an erosion, in recent months, of board confidence in my leadership."
But the differences between Mr. Hays and Sutter's board were "over style and approach. There were no substantive issues," Mr. Heath said. Sutter will "absolutely" push forward with the same agenda Mr. Hays put in place, he said.
Gary F. Loveridge, a senior vice president and general counsel for Sutter, has been named interim CEO. The board is in the process of choosing a firm to conduct a national search for Mr. Hays' replacement, although internal candidates will be encouraged to apply, Mr. Heath said.
Sutter, whose operations are centered in Northern California, includes 14 hospitals, 40 other healthcare facilities and 5 medical foundations, with more than 3,000 affiliated physicians and nearly 15,000 employees. It had $964.5 million in net patient revenues in 1993. Profits were not immediately available.