Anthony Tersigni, chief executive officer of St. John Health System in Detroit, couldn't be happier with the executive pedigree he's obtained in the course of acquiring hospital systems on the city's east side.
By name, they are Michael Breen and Timothy Ryan. Each, rather reluctantly, came to manage local hospital systems their fathers once ran.
Breen, 45, followed in the illustrious footsteps of his father, Francis Breen, at Saratoga Hospital in Detroit.
Since assuming the top spot at Saratoga eight years ago on less than 24 hours' notice, Breen has steered Saratoga adroitly. This year, the hospital merged into the St. John umbrella. And Breen, who is president of Saratoga, is set in January to become president of an operating unit that includes Saratoga and nearby Holy Cross Hospital of the St. John system.
Ryan, 37, took the helm of Detroit-Macomb Hospital Corp. last month upon the retirement of his dad, Jack Ryan. Jack Ryan, 71, who was a local pioneer in hospital mergers, entered Detroit-Macomb into an affiliation agreement with St. John in one of his last acts as CEO.
The agreement, subject to due diligence, would combine Detroit-Macomb and its $252.8 million in healthcare revenues with St. John, the city's leading east-side healthcare system with 1995 revenues of $660 million.
"The succession took shape over the past two or three years," Timothy Ryan said. "The board kept getting dad to postpone his retirement. He's a hardheaded Irishman. But he finally realized that there would always be some major issue to get through."
Family succession is a rarity in the hospital business, especially in Michigan where most hospitals are not-for-profits controlled by independent boards of directors.
As more and more hospitals merge to combine services and reduce excess bed capacity, the odds are increasingly against a son or daughter succeeding his or her father to a hospital's presidency, said Charles Ewell, president of the Governance Institute, a La Jolla, Calif.-based center for educating healthcare trustees.
"Family succession at a nonprofit gets more and more difficult as the size of an organization grows," Ewell said. "In a bigger organization, you come up against a larger and more talented pool of executives."
Detroit has more than its share of experience with family affairs in the hospital industry. Not only do Breen and Ryan have long futures mapped out with their respective institutions, said Tersigni, but Pontiac Osteopathic Hospital just ended a long reign by the Whitlow family.
That story is less tidy. Jack Whitlow, who followed his father as CEO and served for several years in the top spot, resigned from the hospital this autumn amid allegations of nepotism and lack of institutional control.
Breen and Ryan not only have the support of their hospital boards, but an independent vote of confidence from St. John. Tersigni described Breen and Ryan as "young Turks" with the vision and energy to help St. John continue to consolidate healthcare on the east side.
"These guys understand the marketplace; they're bright and team-oriented," Tersigni, 47, said.
Tersigni, who became a hospital CEO at the tender age of 33, added with a laugh, "I'm excited to have these youngsters around."
Breen's ascendancy was a trial by fire. He rose to the top of Saratoga eight years after his father's retirement.
As it happened, Breen had less than a day in 1989 to make up his mind to accept the hospital presidency after his predecessor was ousted in a management shakeup.
Breen said he thought the hospital board was trying to recapture the magic of his father.
Saratoga board member Dallas Dagenais remembers it differently. He said Michael Breen, who had worked at the hospital from his teen years, was very knowledgeable about operations and had a good rapport with the staff. Breen was head of physician-support services at the time of the shakeup.
Dagenais said when Michael was selected, there was little discussion in the board room about Francis Breen's legacy and little concern about the perception of family succession. Francis Breen was deceased by that time.
"We were looking for somebody internally to take over, and Michael Breen had excellent qualifications," Dagenais said.
Michael Breen, like Timothy Ryan, resisted a career in hospital administration in his youth. Breen wanted to be a physician but changed course to become a pharmacist. Eventually, he was coaxed into administration and rose through the ranks.
Timothy Ryan set out a path in law, becoming an attorney with General Motors Corp. in 1986 and working there long enough to participate in the GM acquisition of Electronic Data Systems and the divestiture of Detroit Diesel Corp. to Roger Penske.
Ryan joined Warren-based Detroit-Macomb as legal counsel in 1988 after a mentor convinced him that healthcare would be a challenging field.
"When I graduated from law school, I wanted to join a private firm and bill for ungodly sums of money," Ryan said with a laugh.
Michael Breen's tenure at Saratoga has won him abundant praise. Out of the chaos of his ascendancy, he put the hospital on a strong financial setting. Every year since Breen took the helm, the hospital has posted an operating surplus. Last year, Saratoga's surplus was $1.8 million on revenues of about $60 million.
Ryan is looking to build on his father's foundation. Ryan served as chief operating officer for two years before succeeding his father this month.
The Ryans and the entire hospital system have gone through the rigors in the past decade. Detroit-Macomb absorbed $25 million in losses in the five years after opening Detroit Riverview Hospital in 1987, Ryan said. Jack Ryan shunned the suburbs to build a hospital to replace three older Detroit facilities, because he thought an inner-city community hospital was needed and could flourish if operated properly.
Experience proved Ryan right. Detroit Riverview had an operating surplus of more than $1 million last year on revenues of about $110 million.
Timothy Ryan said he is glad to be a part of that heritage. He said he is convinced his role at Detroit-Macomb was reviewed by the board of directors prior to his selection as CEO.
"Nobody dictates to this board," Ryan said. "I'm totally comfortable with their approach and attitude to the selection process. The way board members zealously guard their reputation, I can tell you that they chose the candidate that they felt was best qualified to lead the organization."