Sherif Abdelhak did it bigger and faster than anyone in healthcare this side of Rick Scott, building a hospital and medical school empire that stretched across Pennsylvania and into West Virginia and New Jersey.
In the end, his strategy proved too big and too fast, costing him the job as president and chief executive officer of Pittsburgh-based Allegheny Health, Education and Research Foundation (June 15, p. 36).
But while former Columbia/HCA Healthcare Corp. boss Scott operated in the go-go world of investor-owned healthcare, Abdelhak's base was an urban tertiary-care hospital. That backdrop begs the question of how and why Allegheny trustees allowed the wildly ambitious Abdelhak to spread the organization's resources so far afield.
Part of it might be that ferocious Pittsburgh pride. Not only did Abdelhak add zest to the Western Pennsylvania healthcare market, he also engineered the acquisition of hospitals and medical schools in Philadelphia, traditionally regarded as the state's most important metropolis. A Pittsburgh company acquiring such well-known Philadelphia institutions as Medical College of Pennsylvania and Hahnemann University's medical school was viewed as a civic triumph in a town suffering from an acute case of Second City syndrome.
The prestige factor also seemed to intoxicate the board. As AHERF grew, so did its reputation as a major regional force in the integrated delivery of medical services. Ultimately, however, strategic miscalculations, tougher competition and tighter reimbursement took a toll on the high-flying company. The results were predictable: operating losses, downgraded credit ratings, staff layoffs and disgruntled physicians. Rather than take responsibility, the board forced Captain Abdelhak to walk the plank.
Accountability aside, AHERF offers a number of painful lessons for anyone responsible for managing or governing a not-for-profit healthcare system. Foremost among them: Beware of straying too far from home and your primary source of business.