Trinity Health will continue to see management shifts, as President and Chief Executive Officer Judith Pelham announced that she would retire this year from the Roman Catholic health system.
Pelham, 58, who has led Trinity since its inception in 2000 after the merger of Mercy Health Services and Holy Cross Health System, said last week that she would remain at Trinity at least through June 30, the end of the system's fiscal year. She added that she may remain in the position longer to ensure a smooth transition for her successor.
The resignation comes just one month after William Kreykes was named chairman of the board at the Novi, Mich.-based system, which operates 45 hospitals in seven states. Kreykes succeeded James Hendricks, who had served on the board since the merger. At deadline, Kreykes had not responded to calls seeking comment on Pelham's retirement.
In a news release, Kreykes, who was on the board of Holy Cross before it merged with Mercy to form Trinity, said that the board regretted that Pelham was leaving the system.
"The clinical, financial and operational performance of Trinity Health has been very strong under Judy's leadership," Kreykes said. "Every year has resulted in improvement over the previous year. The forecast for our future continues to be positive."
Pelham, who was president and CEO of Mercy from 1993 until the merger, said it was the right time to retire. She pointed to the successful integration of the two systems and said Trinity has made big investments in information technology and increased its focus on patient quality and safety. The system will be presented the 2004 National Quality Health Care Award this week. The award is co-sponsored by the National Committee for Quality Health Care and Modern Healthcare.
"We have laid the groundwork," Pelham said. "I made a commitment to see through the integration and get the organization well-launched. We have really launched a new system."
Pelham said her resignation is not connected to Kreykes' appointment to the board. "We have a wonderful culture," she said. "To me it's a logical time to pass the baton. It is time to let other people lead."
In the fiscal year ended June 30, 2003, Trinity reported net income of $111 million on revenue of $5 billion. The system reported higher patient volumes, improved revenue management and reduced losses on physician practices.
During her time as CEO, Pelham has served on several national and regional boards, including those of pharmaceutical company Amgen and Catholic CEO Healthcare Connection, a forum of Catholic health system leaders.
While she was a board member at Thousand Oaks, Calif.-based Amgen, Pelham sold 47,000 shares of the pharmaceutical company's stock and reaped $3.3 million in July 2003. At that time, Pelham also purchased 47,200 shares for approximately $635,000, according to the company's reporting of shareholder transactions during the last two years.
Trinity's board approved of her role with Amgen and did not believe her transactions violated the system's conflict-of-interest guidelines, which require employees to maintain objective relationships with vendors, a spokesman said.
A number of hospital boards are being restructured to eliminate conflicts of interest involving board members (See Special Report, p. 22).
The system has not specified a deadline to find Pelham's successor. The board will create a committee that will work with a yet-to-be-named search firm to find candidates, a spokesman said. The final decision will be left to Trinity's board of directors.
The search for a new executive is likely to take from six to nine months, said Mark Madden, vice president of MSA Executive Search, which is part of Clark Consulting, and is not working with Trinity. "The available pool of talent to handle that large of a system is fairly small," Madden said. "It's a challenge for any hospital or healthcare system."