. Duncan Moore, Jr.
In a surprise change of mind, Fred Brown, president and chief executive officer of BJC Health System in St. Louis, will step down effective Dec. 31 to devote more time to his duties as incoming chairman of the American Hospital Association.
Just months after telling MODERN HEALTHCARE he intended to stay on indefinitely as the top BJC executive, Brown, 57, said he wants to devote his full attention to the AHA and his new wife and stepchildren.
He will keep a hand in at BJC in the newly created post of system vice chairman.
The announcement was made Aug. 5 by John Dubinsky, chairman of the BJC board of directors. Brown will remain a member of BJC's board and the board of BJC's health plan, Health Partners of the Midwest.
Brown relinquishes his post at a time when the system faces serious challenges. BJC's financial picture has a bad case of the dwindles.
Operating margins were 4% in 1997 but slid to 1% for the first six months of 1998. A recent bond rating report by Moody's Investors Service downgraded the outlook on BJC to "negative" from "stable," indicating cause for concern, even though its bonds were rated Aa2. (Aug. 3, p. 36).
A Moody's analyst said he expected BJC executives to work on turning finances around to avoid a bond rating downgrade.
BJC will conduct a national search for Brown's replacement. Ed Case, BJC's chief operating officer, will fill in as necessary during the transition.
It's not known whether Brown's new position will be as lucrative as his old one. According to the St. Louis Business Journal, Brown's 1996 total compensation was $1.1 million.
BJC is the largest integrated healthcare delivery system in the St. Louis region, with $1.7 billion in 1997 revenues. Its 14 hospitals, dozens of physician offices and other services add up to a 31% market share in the region.
Asked why he changed his mind, Brown said last week that after long discussions with his wife he decided "it's time to pull back a little bit and refocus. I've always been one not to say no to anything. You can go seven days a week, a lot of hours. You need to balance your life."
After serving as AHA chairman for 1999, Brown will be speaker of the House for the year ending Dec. 31, 2000.
The chairmanship of the AHA entails nearly constant travel and high-profile public appearances. The association chairman has to be able to put his or her homefront responsibilities on automatic pilot.
Richard Wade, the AHA's senior vice president for communications, said that chairmen are "invited everywhere for everything, anytime you can imagine. And remember, it's a three-year commitment."
Brown had been president and CEO of Christian Hospital Northwest and Northeast, which joined Barnes-Jewish Hospital to make the "C" in BJC in 1993. After a national executive search, Brown was then named president of the system. Charles Knight, a kingpin in St. Louis industry and longtime board chairman of Barnes Hospital, was known to hold Brown in high regard.
But Knight resigned as system board chairman May 15, citing business obligations, and was succeeded by Dubinsky.
"To be fair to the organization," Brown said, "BJC needed full-time, on-site leadership. During this phase I was not able to provide that. I went to our leadership on the board to ask them to allow me to step down as president and CEO but to continue to serve on the board."
Brown leaves BJC in vastly different condition than he found it. Under his leadership its far-flung institutions and services began to integrate into a coherent whole. The process isn't finished, but the strategic vision is in place and being carried out.
Other highlights of Brown's tenure as system CEO include aligning the community hospital medical staff with the Washington University Medical School, consolidating women's and children's services into several high-volume units, integrating information systems, rebuilding the Barnes-Jewish campus to beef up outpatient services and engineering mergers with Missouri Baptist Health System and St. Louis Children's Hospital.