Fairview Health Services, a prominent academic health system based in Minneapolis, has been operating without a permanent CEO for more than 18 months. But a new top leader will be chosen before 2016 ends.
David Murphy, Fairview's board chairman who has served as interim CEO since Rulon Stacey left the system in March 2015 under a cloud of controversy, told municipal bondholders Tuesday that Fairview plans to name a new chief executive this year. Murphy does not have any healthcare experience and most recently was the CEO of Red Wing Shoe Co., a footwear manufacturer based in Minnesota.
Fairview's executive search committee has already interviewed two unnamed candidates, and several other candidates have “recently emerged.” The not-for-profit system could make an offer as soon as this fall.
“We have a number of candidates that we feel very, very good about,” Murphy said.
Further, Fairview's pending acquisition of health insurer UCare will be put on hold until the new CEO is installed. Fairview announced plans to buy UCare in April and has invested heavily in its insurance arm as a way to take on full payment risk for portions of its patient population.
“When the CEO is in place, we would expect we would consider whether that fit is still a solid one for us,” Murphy said of the UCare deal.
Rulon Stacey, a highly touted healthcare executive who used to be the president of University of Colorado Health and Poudre Valley Health System, stayed at Fairview for only 15 months. His departure was attributed to a “combination of professional differences and personal reasons.” Stacey, now a managing director at consulting firm Navigant, was thought to be the person to bring stability to a system that had faced criticism for aggressive collection practices and botched a merger with Sanford Health.
Fairview has continued to raise eyebrows under Murphy's tenure. This past March, Fairview dropped out of the Minnesota Hospital Association and did not explain why. The system also halted merger plans with University of Minnesota Physicians, although Murphy said Tuesday the two sides still have a “strong relationship.”
Stacey was not the only high-ranking executive to leave Fairview in the past year and a half. Carolyn Wilson, Fairview's chief operating officer, left the system last November to join Beaumont Health in Royal Oak, Mich., and her position was not filled.
Despite the leadership turmoil, Fairview has maintained its financial position. The hospital and doctor network had a 3.5% operating margin on $2.14 billion of revenue in the first half of 2016, compared with a 3.4% margin in the first half of 2015. Fairview also was sitting on almost $1.7 billion of cash and investments as of June 30.