A five-hospital Ohio system that voted last year to stay together despite continued financial difficulties is saying goodbye to its top two executives.
But a spokeswoman for the Health Alliance of Greater Cincinnati said last week's resignations of President and Chief Executive Officer Jack Cook, 55, and Executive Vice President and Chief Financial Officer Phil Tempel, 54, don't mean the system is having second thoughts.
The executives were neither fired nor asked to resign, spokeswoman Gail Myers said.
"They just thought the system needs a change and they need a change," she said. Neither has announced future career plans.
Tempel's resignation is effective July 1. Cook will continue to head Health Alliance until a replacement is named, likely in 2001. Both executives have been with Health Alliance since it was formed in 1995.
Last year, the five hospitals voiced their confidence in the system by waiving their right to opt out of the alliance should it fail to meet certain financial benchmarks by the end of the year (Dec. 13, 1999, p. 40).
The 1,497-bed system, which includes Christ, Jewish and University hospitals in Cincinnati; St. Luke Hospital with campuses in Florence and Fort Thomas, Ky.; and Fort Hamilton Hospital in Hamilton, Ohio, was to have two years to implement a turnaround plan even if financial objectives weren't met.
Health Alliance lost $52 million in 1998 and $36 million in 1999 on about $1 billion in revenue each year.
As it turned out, the vote was moot because the hospital system did meet end-of-year objectives, in part because of internal improvements and in part because the hospital systems against which it benchmarks its performance also did poorly last year.
But Myers called the vote a "proactive commitment" that testified to the hospitals' belief in the partnership.
In the nine months ended March 31 the system lost $9.9 million, an improvement from the $29.1 million loss in the same period last year; but the loss still fell short of the break-even target the system set for fiscal 2000.
Since late last year the system closed its money-losing home health agency and replaced its obstetrics beds at Jewish with acute-care beds. Contract negotiations with managed-care companies for higher prices are ongoing, Myers said.
Other cost-saving and quality-enhancement initiatives include management of major service lines across all five hospitals.
Not all money-losing operations are on the chopping block. The system does not intend to divest its 170-member physician group, Alliance Primary Care, because its financial losses are offset by the business it generates for the hospital, Myers said. The hospital wouldn't disclose how much the physician group is losing.