In back-to-back announcements last week, two Catholic health systems named chief executives to replace retiring officers.
Trinity Health, Novi, Mich., selected Joseph Swedish to replace outgoing President and Chief Executive Officer Judith Pelham, 59, officials said Nov. 10. The appointment puts Swedish at the head of a health system with $5.3 billion in annual revenue, an operation four times larger than Centura Health, Englewood, Colo., where the 53-year-old has been president and CEO since 1999. Pelham earned $1.1 million in wages, plus $764,077 in compensation for benefits and expenses in 2003. Centura would not immediately release Swedish's 2003 salary, but he earned $550,314 in wages, plus $489,800 for benefits and expenses in 2002.
Swedish, who is expected to start at Trinity on Jan. 1, 2005, will become its second president. The system, which owns 29 hospitals, was formed by the May 2000 merger of Mercy Health Services, Farmington Hills, Mich., and Holy Cross Health System Corp., South Bend, Ind. Trinity recorded net income of $240.2 million on revenue of $5.3 billion in fiscal 2004, ended June 30. Centura, a 12-hospital system formed in 1996, earned $105 million on revenue of $1.2 billion in fiscal 2004.
William Kreykes, chairman of Trinity's board, said Swedish's experience in Catholic healthcare and large health systems, such as investor-owned HCA, contributed to his selection. Swedish was president and CEO of Nashville-based HCA's east Florida division from 1994 to 1999.
Kreykes said Trinity's board sought an executive with a commitment to Trinity's religious mission and skills to orchestrate the system's advocacy efforts. "The health delivery system in this country needs to be fixed," Kreykes said. "We have tremendous potential to speak with a loud voice in terms of policy development."
Swedish cited his background in investor-owned and not-for-profit health as an asset to Trinity's ministry and advocacy efforts. "I really seriously weighed the opportunity at Trinity," said Swedish, "and I uncovered a nationally recognized innovator in healthcare and advocacy." Swedish's role on external governing boards, including RehabCare Group, St. Louis, will be reviewed by Trinity's board, he said. But Trinity has not forbid such extracurricular activities in the past. Pelham reaped a $3.3 million profit when she sold stock in pharmaceutical company Amgen in July 2003, while she served on the company's board (March 22, p. 14).
On Nov. 11, Bon Secours Health System, Marriottsville, Md., named Richard Statuto as president and CEO to replace Christopher Carney, 57. Bon Secours owns 20 hospitals, with the pending sale of three to investor-owned Health Management Associates, Naples, Fla. Carney earned $784,963 in wages and $178,747 in benefits in 2002. The company would not immediately release Carney's 2003 salary.
Statuto left St. Joseph Health System, Orange, Calif., in October after nine years as CEO to be closer to his wife and four children, who moved to Gettysburg, Pa., two years ago to be near extended family.
"The first thing for me to do is listen and learn from others," said Statuto, who will arrive at Bon Secours Feb. 1, 2005. Carney is expected to remain until next August to aid in Statuto's transition. He named employee development, quality initiatives and increased access to technology among his top priorities upon arrival.
Statuto, 45, will have to address some financial challenges at the system, which earlier this year announced it would have to restate two years' worth of profits after its audit committee found that a former chief financial officer manipulated financial statements at Bon Secours Cottage Health Services in Grosse Pointe, Mich.; a nursing-care center, Sisters of Bon Secours Nursing Care Center; and a Michigan joint venture, Bon Secours Place at St. Clair Shores.
The Securities and Exchange Commission and the U.S. attorney's office in Baltimore subpoenaed the health system for investigations regarding the accounting irregularities, which spanned seven years and wrongly added $64.9 million to the books from improperly reported assets or nonexistent property, equipment or buildings. At deadline, Diana Stager, a Bon Secours spokeswoman, said she did not know the status of either investigation.
Statuto said his long-term goal is to ma- neuver Bon Secours hospitals into the No. 1 or No. 2 spot in each market they serve, he said. "We feel that's very important," said Donald Seitz, chairman of Bon Secours' directors' search committee. Leading in market share increases providers' leverage with insurers, he said. Seitz said Statuto's strong performance at St. Joseph and his experience in Catholic healthcare led to his selection. For Statuto, his new employer's religious sponsorship was an important factor as well. "I've been changed at the core of who I am because I've spent 17 years with four religious congregations," he said.
The appointments fill the final two of four CEO vacancies in Catholic health systems after a spate of departures between March and May. Anthony Tersigni was named president and CEO of Ascension Health, St. Louis, in June, replacing Douglas French, who stepped down in May, citing personal reasons. Robert Haddad assumed the top office at Caritas Christi Health Care in mid-May after the Boston-based health system's CEO, Michael Collins, departed in April and an interim executive, consultant Emmett Murphy, left in early May.