After helping lead a dramatic financial turnaround at Seattle-based Providence Health System over the past seven years, John Koster, a physician with broad experience in management, was named last week as president and CEO of the far-flung network of 19 hospitals.
Koster, a 53-year-old internist, assumed overall control after serving for the past six months in an interim capacity in those two key roles at Providence, which has 34,000 employees and stretches over four states: Alaska, California, Oregon and Washington.
"I've enjoyed a close working relationship with the board over the last several years as chief operating officer," Koster says. "We've been fortunate to have done quite well financially over the last several years. We've developed a strong management team that I've had a large part of bringing together, so I think (the board members) felt they wanted to keep this team together."
Koster arrived at Providence in April 1997 as chief medical officer for two years, then moved up to chief executive for the Washington region before his appointment as the system's COO in 2001. He replaces Hank Walker, who spent about seven years as president and CEO before leaving on a sabbatical in October 2003 that led to his retirement.
"We are pleased to have John continue to further the mission, vision and direction of Providence in these very challenging times for healthcare," says Sister Barbara Schamber, the presiding member of the system's sponsoring organization, Sisters of Providence. "John well understands and is committed to the organization's mission and core values, seeing that all that is undertaken is done in order to serve the people entrusted to our care."
Koster's connection with the system stretches back to the mid-1970s, when he completed his internship at Providence Portland Medical Center. He says his link to the clinical aspects of the job has helped him succeed in management. "I understand how physicians think, and how they interact with each other. I probably can bring a little better understanding of the physician culture."
He was also a key part of the management team that helped turn a net loss of about $28 million in 1997 into a net profit of $177 million in 2003. Over that period, Providence added two acute-care hospitals, divested three others, sold a health plan and closed a medical group to help pull itself out of a sea of red ink.
In addition to the acute-care hospitals, Koster will oversee an integrated system that includes 19 free-standing long-term-care facilities and a network of physician organizations and sponsored health plans that cover more than 606,000 members in Oregon and southwest Washington.