The old adage that the devil is in the details seems to be the best explanation for why Rulon Stacey is stepping down next month as CEO of Minneapolis-based Fairview Health Services. Stacey worked with the Fairview board to draft a strategic plan, but differences arose about how to put the plan into action, apparently leading to Stacey's resignation Tuesday.
“The creation of a strategic plan and the implementation of a strategic plan are very different,” David Murphy, Fairview's board chair, said in an interview.
Fairview announced Tuesday that Stacey was resigning from his position at the not-for-profit health system by March 1 due to a “combination of professional differences and personal reasons.”
The professional differences centered on Fairview's strategic plan, which has been described as focused on turning Fairview into a higher-performing integrated delivery system. Stacey, other executives and the board built the strategic blueprint after he joined in late 2013. But the groups differed on how to achieve that goal.
Murphy said there “isn't any one example” of where the board and Stacey didn't see eye to eye. Speaking more broadly, he said Stacey and the board “weren't aligned.”
Murphy and two other board members, former Fairview interim CEO Chuck Mooty and University of Minnesota Medical School Dean Dr. Brooks Jackson, will serve as the system's interim leaders.
“It doesn't seem as though there was this complete train wreck where there was this case for removing him,” said Leigh Turner, an associate professor of medical ethics at the University of Minnesota.
But some view the shake-up as disconcerting, especially given the industry's growing emphasis on changing the payment and care delivery structure.
“I think it's very disruptive and unfortunate for Fairview, because this is a time when healthcare systems need to transform from volume-based to value-based care,” said Jim Begun, a healthcare administration professor at the University of Minnesota. “And that takes many years to do.”
Fairview will assemble a search committee soon, Murphy said. The system also will likely hire an outside firm to manage the process. Finding the next CEO is expected to be quicker this time around since the system isn't dealing with other obstacles, such as the issues associated the abandoned Sanford Health merger, Murphy said.
Stacey's departure, and the time it will take to find a replacement, marks another setback in a tumultuous five years for Fairview. The academic health system—which operates six hospitals, including the University of Minnesota Medical Center, and has an ownership stake in a seventh—has had two prominent run ins with Minnesota's attorney general.
One involved aggressive emergency room patient collection practices through its outsourced partner, Accretive Health. Accretive was eventually barred for several years from doing business in Minnesota. The other involved a proposed merger with Sanford Health, Sioux Falls, S.D. State officials questioned the validity of an out-of-state health system owning the University of Minnesota's academic medical center. The deal ultimately fell through.
Fairview also experienced trouble with its partially owned health insurance company, PreferredOne. PreferredOne was one of the most popular health plan options in Minnesota's exchange last year, but it dropped out of the marketplace because it wasn't financially sustainable.
When asked if PreferredOne had anything to do with Stacey's departure, Murphy called it a “non-issue.” Stacey was not available for an interview.
There also weren't any disagreements over Fairview's accountable care organization or its acquisition strategy, Murphy, Mooty and Jackson said in the interview. Fairview is one of 19 remaining Medicare Pioneer ACOs, which are testing quality-based, risk-bearing payments for providers. It has not shared in any savings so far.
Since Fairview's failed merger with Sanford, it has not acquired other hospitals although several competitors have. But it did sign a five-year co-management agreement with the University of Minnesota and UM Physicians, a “virtual” merger that brought the university doctors and health system closer together.
Stacey was brought into Fairview with a great deal of fanfare. He was known for his emphasis on quality, having helped one of his previous organizations, Poudre Valley Health System in Fort Collins, Colo., win the Malcolm Baldrige National Quality Award.
“Obviously, this world is changing in a big way, and we want somebody who's strategic in their thinking,” Murphy told Modern Healthcare at the time Stacey was hired.
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