Ascension Health, the nation's largest Roman Catholic health system, is searching for a new chief executive officer after Douglas French announced last week that he was stepping down after three years in the top post.
French's resignation marks the fourth time in the past two months that a CEO at a Catholic system has walked away from executive leadership altogether. Judith Pelham, 58, announced she was retiring this year from Novi, Mich.-based Trinity Health (March 22, p. 14), and Richard Statuto, 45, said in April that he was resigning from St. Joseph Health System, Orange, Calif., after nine years on the job. Michael Collins, the longtime president and CEO of Caritas Christi Health Care, Boston, also resigned last month, ending a 10-year tenure in the top post.
At St. Louis-based Ascension, which operates 67 hospitals, the board appointed Anthony Tersigni, 54, as interim CEO. Tersigni, the system's chief operating officer, has held the interim position since Jan. 1 when French went on a paid four-month professional sabbatical. French, 50, had said earlier that he planned to return to the position last week, but then opted to leave Ascension after 25 years.
French, who started at Ascension's predecessor, the Daughters of Charity National Health System, submitted his resignation through a letter sent April 20 to board Chairman John Mudd.
In an interview with Modern Healthcare, Tersigni said French's resignation was voluntary and the system's board did not play a role.
The system has recently struggled with its pension liability, however. In the fiscal year ended June 30, 2003, it used $607.3 million of cash from its hospitals' operations to fund its pension benefits (Dec. 8, 2003, p. 6). Ascension had a profit of $215 million on revenue of $9 billion in fiscal 2003.
But business conditions did not lead to French's resignation, Tersigni said.
"We are already addressing that (pension liability) issue and we are absorbing those liabilities," Tersigni said. "The next person stepping in will be stepping into business as usual."
Mudd said in a news release that the board would move "with all due speed" in selecting a successor. Mudd did not return phone calls seeking comment.
"We have complete confidence that Tony will keep Ascension Health moving forward on its important strategic agenda," Mudd said.
During his tenure, French oversaw the 2002 merger of Ascension with Carondelet Health System, also based in St. Louis. Ascension added eight acute-care hospitals through the deal, in which Ascension paid no cash but agreed to take on $250 million in debt owed by Carondelet.
As a result of the merger with Carondelet, Ascension reported its net income nearly doubled to $215 million last year.
The system's board plans to begin a search for a successor and internal candidates will be considered. Tersigni, a 25-year veteran healthcare executive, said he wanted to be considered for the role on a permanent basis. "It's a great job," he said. "If the board sees fit, I'd be more than happy" to lead the system.
The board recently completed an 18-month succession planning program, which identified key leaders within the system and the potential they had for graduating to the executive ranks, Tersigni said.
French, who was traveling last week and did not return calls seeking comment, said in a news release that he had engaged in extensive personal and spiritual reflection and determined that he did not want to return as CEO, a position he has held since 2001. He did not comment about his next career move.
French is the latest in a trend of CEOs who have decided to step down before reaching the traditional retirement age. Beside Pelham and Statuto, Max Poll, 57, president and CEO of Scottsdale (Ariz.) Healthcare Corp, announced he would retire in October 2005.