Sanford Health CEO Kelby Krabbenhoft, who late last week said he didn't need to wear a mask because he is immune from contracting or transmitting COVID-19 since he tested positive, is retiring.
"We decided that today was a good time to retire," Krabbenhoft said in an emailed statement. "Sanford is in a good place, strongest ever. It is Thanksgiving week and almost exactly 25 years since my family came here. It is a good time to say 'goodbye.'"
Sioux Falls, S.D.-based Sanford's board of trustees on Tuesday described the decision as mutual, and appointed Bill Gassen as Krabbenhoft's replacement, effectively immediately. Gassen most recently served as Sanford's chief administrative officer and has been with the health system since 2012.
Board chair Brent Teiken said in a news release that Gassen's substantial experience with the organization makes him the right person to lead Sanford through these unprecedented times.
"We're extremely optimistic about having his steady hand at the wheel in partnership with our existing leadership team," Teiken said.
Krabbenhoft has served in the CEO role at Sanford since 1996, according to the health system's news release. His total compensation was almost $3.2 million in the year ended June 30, 2018, the latest year for which information is available, according to GuideStar.
His departure comes at a crucial time for Sanford. It's working to close a recently announced merger with Salt Lake City-based Intermountain Healthcare to form a $15 billion health system, the country's seventh largest by revenue. In an emailed statement, Intermountain said that Krabbenhoft's retirement doesn't change its plans to finalize the deal by mid-2021.
Even without the surprise announcement, Krabbenhoft's retirement wasn't likely far off, as the combined health system would be led by Intermountain's CEO, Dr. Marc Harrison.
Krabbenhoft came under scrutiny last week when he sent an internal email to Sanford's 50,000 employees saying that wearing a mask "defies its efficacy and purpose" and sends an "untruthful message that I am susceptible to infection or could transmit it."
A day later, a group of Sanford executives—including Executive Vice President Micah Aberson and excluding Krabbenhoft—wrote an email to employees saying that "when it comes to immunity, the science is evolving and we must continue to follow CDC guidelines." They recommended wearing masks whether or not someone had contracted the virus, and that they "regret that (Krabbenhoft's) message left many frustrated and disappointed."
The World Health Organization said there is not enough data to confirm if antibodies protect individuals from contracting the virus again, what antibody levels are required or how long protection will last. Risk of reinfection remains unknown, according to a recent analysis in JAMA of more than 200 healthcare workers' antibodies.
Major trade associations, including the American Hospital Association, have a launched a campaign encouraging people to wear masks and follow social distancing guidelines.
Krabbenhoft did not address the masking debate in his retirement statement. Instead, he said that he lived up to the original hopes of his predecessor, former Sanford CEO Lyle Schroeder. Schroeder had been Sanford's CEO for 36 years before Krabbenhoft took over.
Sanford managed to nearly double its operating income in the first nine months of 2020 despite the COVID-19 pandemic. The health system drew $222.7 million in operating income on $4.9 billion in revenue in the nine months ended Sept. 30, a 4.6% margin, compared with $117.1 million on $4.6 billion in revenue in the 2019 period, a 2.6% margin.
"He handed me a successful and precious organization," Krabbenhoft said. "Now I get to do the same as I depart."
