Andrew Agwunobi, who has struggled for about 21/2 years to rein in multimillion-dollar losses at Grady Health System in Atlanta, abruptly resigned as president and CEO last week to accept a job as COO of 14-hospital St. Joseph Health System in Orange, Calif.
Agwunobi, hired in March 2003, was successful on the fiscal front--he reduced the system's debt from about $60 million to $7 million--but continued to struggle with big deficits at the system, whose flagship facility is 1,047-bed Grady Memorial Hospital in downtown Atlanta. Annual operating losses, about $40 million per year when he arrived, fell to about $10 million last year, says Agwunobi, who is expected to remain in the job through the end of the year at Georgia's biggest provider of care to the indigent.
The 40-year-old Agwunobi, a pediatrician, says he decided to accept the opportunity at the Catholic health system because he felt that Grady is "solidly on the right track in terms of reform." He dismissed suggestions that the rigors of running a public health system and its labyrinthine bureaucracy prompted his decision. Agwunobi, who is Catholic, says the core values of the St. Joseph system "resonate immensely with my own personal values."
"This was a great opportunity," Agwunobi says. "Grady is at a good point in its history. It all came together, and this was a good time to make that decision."
Asked about the struggles over the past 32 months at Grady, which included a well-publicized fight with federal officials over funding for charity care and a round of layoffs that cost about 200 employees their jobs, Agwunobi says, "Actually, I'm someone who thrives on challenges," operating on the simple equation of "how much good you can do to help the underserved."
Still, one member of the 10-person Fulton-Dekalb Hospital Authority Board, which funds the system, told the Atlanta-Journal Constitution that Agwunobi had informed the board that he "just wasn't having fun anymore."
He will be replaced on an interim basis on Jan. 1, 2006, by John Henry, who is now the COO of the system, which has an annual budget of about $635 million for its two hospitals and a network of 10 neighborhood clinics. One of Agwunobi's first decisions after he was hired was to lure Henry out of retirement just a month or so after his departure in August 2003 as CEO of Emory Hospitals in Atlanta.
Agwunobi has enjoyed a rapid ascent to the top hierarchy of healthcare since he was hired straight out of the Stanford Graduate School of Business in 2001 as CEO of 262-bed South Fulton Medical Center, a Tenet Healthcare Corp. facility in Atlanta. At 37, Agwunobi, who had just earned an MBA, was the youngest chief executive in the city's ultra-competitive healthcare market, and was named one of healthcare's "Up & Comers" in 2002 by Modern Healthcare.
The pace at South Fulton appeared to be a much better fit for the young healthcare executive than the daily pressures of dealing with an enormous, debt-plagued public health system.
In an interview in 2002, about nine months before he left South Fulton for Grady, Agwunobi, discussing the challenges at the for-profit hospital, said, "Let's put it this way. I knew it was going to be an enormous task. But that's what motivates me. It's been fun."