Charles Stokes is no longer the "interim" president and CEO of Memorial Hermann Health System, after the board on Thursday officially named him to the top job. He replaces Dr. Benjamin Chu, who abruptly retired two weeks ago to pursue a role crafting health and public policy.
"Chuck has proven himself to be an outstanding leader during the course of his remarkable career with our organization, working tirelessly to guide Memorial Hermann on its journey toward becoming a high-reliability organization with a strong focus on innovation and transformation," said Memorial Hermann Board Chair Deborah M. Cannon. "He has an unwavering commitment to our patients, medical staff and to Memorial Hermann, the latter of which has been instrumental in helping us transform our operational structure in order to meet the challenges and demands of a rapidly changing healthcare landscape."
Along with serving as interim president and CEO, Stokes, who began his career as a registered nurse, was executive vice president and chief operating officer. As COO, he oversaw operations for 17 hospitals, more than 200 outpatient clinics, 25,000 employees and 5,500 affiliated physicians. Stokes joined Memorial Hermann in 2008.
"I am honored and humbled to work alongside our exceptional employees and talented medical staff as we fulfill our mission to advance the health of all Houstonians," said Stokes, who was named Modern Healthcare's inagural list of the Top 25 COOs in healthcare. "In its 110 years of faithfully serving this community, Memorial Hermann has grown to become a nationally recognized organization with an unrelenting focus on providing enhanced access to the safest, highest-quality care, all at an affordable cost."
Memorial Hermann late last month announced that it will cut 350 jobs due to escalating costs, declining reimbursements and a softened local economy. Moody's Investors Service revised its outlook for Memorial Hermann to stable from positive and affirmed its A1 rating, affecting roughly $1.2 billion in debt.
"The outlook revision to stable reflects lower operating performance in FY 2017 and market-related challenges to returning to prior margin levels, even with expected improvement," Moody's noted. "Operating challenges include unfavorable payor and service mix changes as the decline in the oil and gas industry has driven lower commercial volume and surgical cases and larger insurers have exited the public health exchange."
Nonetheless, Moody's said the stable outlook and A1 rating reflect the system's "swift and significant initiatives to reduce expenses and enhance revenue which, combined with cashflow from new facilities, is expected to improve margins in FY 2018."
