Catholic Health Senior Leadership Undergoes ‘Major Reorganization’: 7 Changes

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The president and CEO says this new leadership structure will help the system innovate and become more efficient in the face of a shifting healthcare landscape.

Catholic Health, based in Buffalo, New York, has dramatically restructured its senior leadership team.

President and CEO Mark Sullivan announced what the organization described as a “major reorganization” this week, about a year and a half after he was named to the system’s top executive job.

“Change is happening all around us in healthcare and rather than react to the pressures of our industry, we must lead change in the region to sustain our mission and meet the needs of the patients and communities we serve,” Sullivan said in a statement. “This new leadership structure will build on the high quality care that already exists within our system and drive development, innovation and efficiencies that will have an even greater impact on the health of our community.”

The team will spend the next several months transitioning into their new roles, Sullivan said.

“We are all excited about the opportunities before us to lead the transformation of healthcare in our community, but we also know how important smooth transitions are,” he added, “not only for our physician partners and associates, but more importantly, for the patients and long term care residents we serve.”

Here are seven significant changes outlined in Sullivan’s announcement:

  1. Joyce Markiewicz, who had served as president and CEO of Home and Community Based Care, has been named Chief Business Development Officer for Catholic Health. Sullivan called Markiewicz “the ideal person” for the job, citing her experience developing strategic partnerships and new business initiatives.
  2. Tom Gleason, who has served as chief operating officer for Home and Community Based Care, has been promoted to senior vice president of Home and Community Based Care, in light of Markiewicz’s expanded role. Gleason will oversee Catholic Health’s skilled nursing facilities and home care agencies, according to the announcement.
  3. Gary Trucker, president and CEO of Mount St. Mary’s Hospital, will retire this fall.
  4. Marty Boryszak, former president and CEO of Sisters of Charity Hospital, has been named senior vice president of acute care services at Catholic Health. In light of Tucker’s retirement, Sullivan decided to restructure Catholic Health’s hospital presidents, who will report to Boryszak.
  5. CJ Urlaub, former president and CEO of Mercy Hospital of Buffalo, has been named senior vice president of strategic partnerships, integration, and care delivery in Niagara County for Catholic Health. As part of these responsibilties, he will assume the role as president of Mount St. Mary’s Hospital when Tucker retires.
  6. Eddie Bratko, who had been chief operating officer of Mercy Hospital of Buffalo, has been named president of Mercy Hospital.
  7. John Sperrazza, who had been chief operating officer of Sisters of Charity Hospital, has been named president of the hospital and its St. Joseph campus.

Walt Ludwig, who was named president and CEO of Kenmore Mercy Hospital just last year, will keep his position, according to the announcement.

The overhaul comes after two recent high-level hires. William Pryor was named Catholic Health’s new chief administrative officer, and Dr. Hans Cassagnol was named chief clinical officer and physician executive. And it comes as Catholic Health is currently conducting a national search for a chief operating officer and chief transformation & innovation officer, according to the announcement.

“How healthcare is delivered in the future will be different than it is today and our executive team must be reflective and responsive to these changes,” Sullivan said. “With the new talent we are recruiting to the region and the experienced leaders we have assuming new roles within our system, I am confident we have the right team in place to fulfill our Mission and drive change where it is needed to better serve the community and build upon our success as the quality, safety and patient satisfaction leader in Western New York.”

 

 

 

 

Moody’s Outlook Darkens for Team Health

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UnitedHealth will cancel two-thirds of Team Health’s in-network contracts over the next 11 months.


KEY TAKEAWAYS

Moody’s Investors Service on Friday downgraded the outlook for Team Health from stable to negative.

UnitedHealth has also significantly reduced its payments to Team Health for out-of-network services.

Team Health has accused UnitedHealth of ‘aggressive and inappropriate behavior.’

Team Health Holdings Inc.’s ongoing contract fight with UnitedHealth Group Inc. is hurting the bond status on the Knoxville-based hospital staffing and management company.

Moody’s Investors Service on Friday downgraded the outlook for Team Health from stable to negative, after affirming the company’s B3 Corporate Family Rating and B3-PD Probability of Default Rating.

“The change of outlook reflects rising uncertainty around Team Health’s ability to reduce leverage given its recently disclosed dispute with UnitedHealth Group Inc., one of its largest commercial payors,” Moody’s said.

Moody’s also affirmed the B2 rating on Team Health’s senior secured credit facilities and Caa2 rating on its unsecured notes.

UnitedHealth told Team Health last month that it will cancel two-thirds of its in-network contracts with Team Health between October 2019 until July 2020.

UnitedHealth has also significantly reduced its payments to Team Health for out-of-network services, Moody’s noted.

Team Health provided a statement to HealthLeaders suggesting that it is lawyering up in preparation for more litigation with UnitedHealth.

“As Team Health continues to see more aggressive and inappropriate behavior by payors to either reduce, delay, or deny payments, we have increased our investment in legal resources to address specific situations where we believe payor behavior is inappropriate or unlawful,” the company said.

“To date, Team Health has been successful in getting reasonable reimbursements as a result of that litigation effort. Immediately following their most recent termination, United reached out to Team Health and we have begun negotiations,” Team Health said.

The hospital company said that, so far in 2019, it has successfully resolved eight lawsuits and has filed another 13 lawsuits.

“As United continues to arbitrarily terminate contracts, we expect to file more lawsuits for unfair payment practices and unjust enrichment – and despite United’s urgings we will not surprise bill patients to make up the difference,” Team Health said.

While Moody’s said it believes that Team Health and United will eventually reconcile, “modified contracts are likely to come with lower reimbursement rates for Team Health, which will reduce profitability.”

“Further, a drawn-out negotiation process may lead to disruption to hospital customers and contract losses,” Moody’s said.

“While there is a range of potential outcomes for Team Health, the company’s very high leverage raises the risk that even a modest reduction in profitability will significantly raise debt/EBITDA,” Moody’s said.

TeamHealth’s pro forma debt to EBITDA was estimated by Moody’s at approximately 8.2 times on June 30.

Moody’s noted that the B3 rating is supported by Team Health’s ability to generate positive cash flow of more than $100 million a year, and that the company’s liquidity remains solid.

“The company has a sizable cash balance ($299.4 million as of 6/30/2019), near full availability of its $400 million revolver and no near-term debt maturities,” Moody’s said.

“The company has also shown early signs of progress in executing its business turnaround. This affords the company some flexibility to absorb a modest negative development with respect to contract negotiations with UnitedHealth,” Moody’s said.

Even with that, Moody’s said, the reduced payments from UnitedHealth and potentially other insurers will create a “meaningful decline in free cash flow (that) will likely lead to a rating downgrade.”

“Reduced free cash flow would not only limit the company’s ability to repay debt, but also its ability to execute its tuck-in acquisition strategy,” Moody’s said.

“As United continues to arbitrarily terminate contracts, we expect to file more lawsuits for unfair payment practices and unjust enrichment – and despite United’s urgings we will not surprise bill patients to make up the difference.”

 

 

 

Health Plan Merger: Harvard Pilgrim, Tufts Pursue Tie-Up

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Image result for hospital merger

The organizations expect their combined strengths will enable them to improve affordability, increase access, improve quality, and streamline the customer experience.

Two major nonprofit health plan companies in New England are looking to join forces.

Harvard Pilgrim Health Care and Tufts Health Plan announced Wednesday that they intend to combine their two nonprofit organizations. 

“Our communities and consumers today face four major hurdles in health care: affordability, access, quality of health and a fragmented health care experience across various stakeholders and health systems,” said Tufts Health Plan President and CEO Tom Croswell in a statement. “Through our shared vision, we believe we can tackle these issues and bring more value to the communities we serve.”

Croswell is expected to serve as CEO of the combined organization, while Harvard Pilgrim Health Care President and CEO Michael Carson serves as president, overseeing the combined business lines and subsidiary, according to the announcement.

Joyce Murphy, board chair for Harvard Pilgrim Health Care, is expected to chair the combined board of directors, which will have equal representation from each legacy organization.

“Through the combination of two strong organizations with a commitment to non-profit health care in New England, we will be able to provide even greater value to consumers, as well as improve access to care throughout the region,” Murphy said in the statement.

The two organizations said they expect their combined strengths will enable them to improve affordability “through scale and administrative cost efficiencies,” increase healthcare access, improve healthcare quality, and streamline the customer experience.

The combined organization, which has yet to be named, would serve nearly 2.4 million plan members in Maine, New Hampshire, Massachusetts, Connecticuit, and Rhode Island.

Both boards approved the agreement, but the organizations will remain separate pending regulatory approvals, according to the announcement.

 

Ego Is the Enemy of Good Leadership

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On his first day as CEO of the Carlsberg Group, a global brewery and beverage company, Cees ‘t Hart was given a key card by his assistant. The card locked out all the other floors for the elevator so that he could go directly to his corner office on the 20th floor. And with its picture windows, his office offered a stunning view of Copenhagen. These were the perks of his new position, ones that spoke to his power and importance within the company.

Cees spent the next two months acclimating to his new responsibilities. But during those two months, he noticed that he saw very few people throughout the day. Since the elevator didn’t stop at other floors and only a select group of executives worked on the 20th floor, he rarely interacted with other Carlsberg employees. Cees decided to switch from his corner office on the 20th floor to an empty desk in an open-floor plan on a lower floor.

When asked about the changes, Cees explained, “If I don’t meet people, I won’t get to know what they think. And if I don’t have a finger on the pulse of the organization, I can’t lead effectively.”

This story is a good example of how one leader actively worked to avoid the risk of insularity that comes with holding senior positions. And this risk is a real problem for senior leaders. In short, the higher leaders rise in the ranks, the more they are at risk of getting an inflated ego. And the bigger their ego grows, the more they are at risk of ending up in an insulated bubble, losing touch with their colleagues, the culture, and ultimately their clients. Let’s analyze this dynamic step by step.

As we rise in the ranks, we acquire more power. And with that, people are more likely to want to please us by listening more attentively, agreeing more, and laughing at our jokes. All of these tickle the ego. And when the ego is tickled, it grows. David Owen, the former British Foreign Secretary and a neurologist, and Jonathan Davidson, a professor of psychiatry and behavioral sciences at Duke University, call this the “hubris syndrome,” which they define as a “disorder of the possession of power, particularly power which has been associated with overwhelming success, held for a period of years.”

An unchecked ego can warp our perspective or twist our values. In the words of Jennifer Woo, CEO and chair of The Lane Crawford Joyce Group, Asia’s largest luxury retailer, “Managing our ego’s craving for fortune, fame, and influence is the prime responsibility of any leader.” When we’re caught in the grip of the ego’s craving for more power, we lose control. Ego makes us susceptible to manipulation; it narrows our field of vision; and it corrupts our behavior, often causing us to act against our values.

Our ego is like a target we carry with us. And like any target, the bigger it is, the more vulnerable it is to being hit. In this way, an inflated ego makes it easier for others to take advantage of us. Because our ego craves positive attention, it can make us susceptible to manipulation. It makes us predictable. When people know this, they can play to our ego. When we’re a victim of our own need to be seen as great, we end up being led into making decisions that may be detrimental to ourselves, our people, and our organization.

An inflated ego also corrupts our behavior. When we believe we’re the sole architects of our success, we tend to be ruder, more selfish, and more likely to interrupt others. This is especially true in the face of setbacks and criticism. In this way, an inflated ego prevents us from learning from our mistakes and creates a defensive wall that makes it difficult to appreciate the rich lessons we glean from failure.

Finally, an inflated ego narrows our vision. The ego always looks for information that confirms what it wants to believe. Basically, a big ego makes us have a strong confirmation bias. Because of this, we lose perspective and end up in a leadership bubble where we only see and hear what we want to. As a result, we lose touch with the people we lead, the culture we are a part of, and ultimately our clients and stakeholders.

Breaking free of an overly protective or inflated ego and avoiding the leadership bubble is an important and challenging job. It requires selflessness, reflection, and courage. Here are a few tips that will help you:

  • Consider the perks and privileges you are being offered in your role. Some of them enable you to do your job effectively. That’s great. But some of them are simply perks to promote your status and power and ultimately ego. Consider which of your privileges you can let go of. It could be the reserved parking spot or, like in Cees ‘t Hart’s case, a special pass for the elevator.
  • Support, develop, and work with people who won’t feed your ego. Hire smart people with the confidence to speak up. Humility and gratitude are cornerstones of selflessness. Make a habit of taking a moment at the end of each day to reflect on all the people that were part of making you successful on that day. This helps you develop a natural sense of humility, by seeing how you are not the only cause of your success. And end the reflection by actively sending a message of gratitude to those people.
  • The inflated ego that comes with success — the bigger salary, the nicer office, the easy laughs — often makes us feel as if we’ve found the eternal answer to being a leader. But the reality is, we haven’t. Leadership is about people, and people change every day. If we believe we’ve found the universal key to leading people, we’ve just lost it. If we let our ego determine what we see, what we hear, and what we believe, we’ve let our past success damage our future success.