(Story updated at 4:33 p.m. ET.)
Richard Umbdenstock will end an eight-year run as president and CEO of the American Hospital Association, the nation's most powerful hospital trade group, at the end of 2015, the AHA confirmed Friday.
The AHA's board has hired executive search firm Korn Ferry to find Umbdenstock's successor. The search committee will be led by Jim Skogsbergh, CEO of Downers Grove, Ill.-based Advocate Health Care and the AHA's board chair-elect for 2015. The goal is to find a replacement by next summer.
Umbdenstock, 64, has led the AHA since January 2007 and has consistently appeared on Modern Healthcare's 100 Most Influential People in Healthcare ranking.
In a note to members, Umbdenstock said leading the hospital association was the “highlight” of his career.
“For the past eight years, it has been my privilege to learn from you and to represent you,” Umbdenstock wrote. “Together, we have accomplished a great deal—building a better health system for all.
“I am enormously proud of America's hospitals, their leaders and the women and men who care for patients every day,” he continued. “I've been honored to be part of a field where doing the extraordinary is the ordinary. Your dedication and commitment to your mission, patients and community continue to inspire me.”
Under Umbdenstock's watch, the AHA has grown in influence and was a key stakeholder when President Barack Obama was crafting his hallmark healthcare law, the Patient Protection and Affordable Care Act, in 2009. But the past several years have not gone completely as expected.
The nation's 5,000 hospitals had to concede a lot in the final version of the reform law: annual cuts to Medicare reimbursement rates, fewer Medicare and Medicaid supplemental payments, and quality programs that penalize some hospitals and reward others. It was hoped, however, that expanding health insurance to millions of Americans would reduce hospitals' uncompensated care and thereby offset those financial concessions.
Since the law was enacted, federal sequestration was enacted, which slashed Medicare payments to hospitals further over the next decade. The U.S. Supreme Court also ruled that the expansion of Medicaid was optional, not mandatory, which has left many hospitals in Republican-controlled states in the quandary of decreased federal payments combined with persistent rates of uninsured. Umbdenstock, one of the highest-paid healthcare association executives, and the AHA have had to balance reform battles with other regulatory issues as well—including legal challenges over the much-maligned two-midnight rule, ramped up audits from private Medicare contractors and federal antitrust scrutiny over hospital mergers.
Despite those challenges, Umbdenstock, a former top executive with Renton, Wash.-based Providence Health & Services, has pressed on. The AHA, which spent $18.4 million on lobbying last year, has urged hospitals and health systems to move away from the current fee-for-service reimbursement environment to one that rewards value and quality, but the group has argued hospitals need money to weather that transition.
“The future will be in reserving acute care for when it's absolutely necessary but trying to reach the community through less intensive, less expensive forms of intervention,” Umbdenstock told Modern Healthcare earlier this year. “But everybody's question is, how do you make it work financially?”
Follow Bob Herman on Twitter: @MHbherman