The unexpected exit of Fairview Health Services CEO Rulon Stacey announced last week has some observers wondering when, or if, the Minneapolis-based system will settle down after several years of turmoil.
“I was surprised,” said Allan Baumgarten, a Minneapolis healthcare consultant. “Presumably (board members) made their pick with a goal of restoring some stability.”
Stacey previously served as the highly regarded CEO of Poudre Valley Health System in Fort Collins, Colo. The last permanent Fairview CEO resigned in March 2012, following a nationally reported scandal over aggressive bill collection practices by a private contractor.
Stacey's last day with Fairview will be March 1, about 15 months after he joined the health system. Fairview cited a “combination of professional differences and personal reasons” for Stacey's departure. Stacey worked with board members to craft Fairview's strategic plan. But the board and Stacey differed on how to carry out that framework.
“The creation of a strategic plan and the implementation of a strategic plan are very different,” said David Murphy, the not-for-profit system's board chairman. But he added there “isn't any one example” of where the board and Stacey didn't see eye to eye. Stacey was unavailable for comment.
“No one can think of a 15-month tenure as a successful outcome,” said Leigh Turner, an associate professor of medical ethics at the University of Minnesota.
The $2.7 billion system, which owns the University of Minnesota Medical Center, posted a 4% operating margin in the first nine months of 2014. But over the past several years, Fairview has had high-profile run-ins with Minnesota's attorney general. One issue involved the actions of a contractor, Accretive Health, in questionable collection tactics against emergency department patients.
Another conflict involved a proposed merger with Sanford Health, Sioux Falls, S.D., that ultimately was dropped.
Fairview owns PreferredOne, a health plan that left Minnesota's exchange last year because of financial troubles, forcing thousands of customers to switch plans. And Fairview's Medicare Pioneer accountable care organization has not yet achieved savings.
Fairview's board will create a search committee to find the next CEO.
Stacey's departure is “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.”