CEO gets 15 years in prison for $150M healthcare fraud

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The CEO of a group of Texas-based hospice and home health companies was sentenced Feb. 3 to 15 years in prison for his role in a $150 million healthcare fraud and money laundering scheme, according to the Department of Justice

Henry McInnis was sentenced more than a year after he was convicted of conspiracy to commit healthcare fraud, conspiracy to commit money laundering, obstruction of justice and healthcare fraud. 

From 2009 to 2018, Mr. McInnis and others submitted more than $150 million in false and fraudulent claims for healthcare services. The claims were submitted through Merida Group, a hospice company with dozens of locations in Texas. 

Mr. McInnis was CEO of Merida. He had no medical training but acted as the director of nursing for the company. He also enforced a companywide practice of falsifying medical records to conceal the scheme and ordered employees to change medical records to make it appear patients were terminally ill. 

Mr. McInnis also paid bribes to physicians to certify unqualified patients for home health and hospice. 

Mr. McInnis was sentenced less than two months after the owner of Merida Group, Rodney Mesquias, was sentenced to 20 years in prison and ordered to pay $120 million in restitution. 

As fraud rises, CFOs must approach numbers skeptically, report finds

https://www.cfodive.com/news/Center-Audit-Quality-financial-reporting-fraud/593123/

Executives might be committed to accuracy, but middle managers and others throughout the organization must be on board, too.

The pandemic is increasing financial reporting fraud, putting the onus on CFOs to create an organization-wide system that prevents wrongdoing, a coalition of auditing and other oversight groups said in a report released today.

Financial statement fraud in public companies is real and that risk has only increased during the Covid-19 pandemic,” said Julie Bell Lindsay, executive director of the Center for Audit Quality, one of four groups to release the report.

To help ensure the integrity of their company’s financial reporting, CFOs can’t rely on external auditors as their bulwark against fraud; they must weave protection into the fabric of the organization and exercise the same skepticism toward numbers auditors are trained to do.

“The strongest fraud deterrent and detection program requires extreme diligence from all participants in the financial reporting system,” Lindsay said. “Certainly, you have internal and external auditors, but you also have regulators, audit committees and, especially, public company management.”

Heightened stress

The report looks at SEC enforcement data from 2014 to 2019, a period of relative calm Linsday said can help set a baseline for assessing how much in pandemic-caused fraud regulators will find when they do their post-crisis analysis.

“The timing of this report is really a great way to … remind all the folks in the financial reporting ecosystem that … the pressures for fraud to happen are strong right now,” she said. 

Improper revenue recognition comprises about 40% of wrongdoing in financial reporting, more than any other type, a finding that tracks an SEC analysis released last August. 

Companies tend to manipulate revenue in four ways:

  1. The timing of recognition
  2. The value applied
  3. The source
  4. The percentage of contract completion claimed

The report singles out revenue-recognition manipulation by OCZ Technology Group, a solid-state drive manufacturer that went bankrupt in 2013, as a typical case.

The company had to restate its revenues by more than $100 million after it was caught mis-characterizing sales discounts as marketing expenses, shipping more goods to a large customer than it could be expected to sell, and withholding information on product returns.

The CEO was charged with fraud and the CFO with accounting, disclosure, and internal accounting controls failures.

The report lists three other common types of fraudmanipulation of financial reserves, manipulation of inventories, and improper calculation of impairment.

Reserve issues involve how, and when, balances are changed, and how expenses are classified; inventory issues involve the amounts that are listed and how much sales cost; and impairment issues involve the timing and accuracy of the calculation. 

Increase expected

More of these kinds of problems will likely be found to be happening because of the pandemic, the report said. 

“This is where all of this comes to a head,” Lindsay said. “You certainly can see pressure, because some companies are struggling right now and there can be pressure to meet numbers, analysts expectations.”

The pressure finance professionals face is part of what the report calls a “fraud triangle,” a convergence of three factors that can lead to fraud: pressure, opportunity and rationalization.

In the context of the pandemic, pressure comes as companies struggle with big drops in revenue; opportunity arises as employees work remotely; and the rationalization for fraud is reinforced by the unprecedented challenges people are facing. 

“It could be anything,” said Lindsay. “‘My wife just lost her job, so I need to make up for it.'”

The report lists fraud types that analysts expect are rising because of the pandemic:

  • Fabrication of revenue to offset losses.
  • Understatement of accounts receivable reserves as customers delay payments. 
  • Manipulation of compliance with debt covenants. 
  • Unrecognized inventory impairments.
  • Over- or understated accounting estimates to meet projection.

About a dozen types in all are listed. 

“Past crises have proven that at any time of large-scale disruption or stress on an economy or industry, companies should be prepared for the possibility of increased fraud.” the report said. 

Lindsay stressed three lessons she’d like to see CFOs take away from the report.

First, the potential for fraud in their companies shouldn’t be an afterthought. Second, protection against it is management’s responsibility but there’s also a role for company’s audit committee, its internal auditors and it’s external auditors. Third, CFOs and the finance executives they work with, including at the middle management level, must bring that same skepticism toward the numbers that auditors are trained to bring.

“Professional skepticism is a core competency of the external auditor and, quite frankly, the internal auditor,” she said. “Management and committee members are not necessarily trained on what it is, but it doesn’t mean you shouldn’t be exercising skepticism, [which is] asking questions about the numbers that are being reported. Is this exactly what happened? Do we have weaknesses? Do we have areas of positivity? It’s really about drilling down and having a dialogue and not just taking the numbers at face value.”

In addition to the Center for Audit Quality, Mitigating the Risks of Common Fraud Schemes: Insights From SEC Enforcement Actions was prepared by Financial Executives International, The Institute of Internal Auditors and the National Association of Corporate Directors.

Sanford Health CEO out after two decades following mask controversy

Sanford Health, CEO Kelby Krabbenhoft part ways
  • Sanford Health’s CEO Kelby Krabbenhoft is leaving the top exec role after almost 25 years, according to a Tuesday announcement from the Sioux Falls, South Dakota-based system, following controversial statements the outgoing CEO made about mask wearing during the coronavirus pandemic.

Krabbenhoft, who has served as CEO since 1996, sent an internal memo to Sanford’s 50,000 employees on Wednesday arguing wearing a mask would defeat its purpose, as he’d already contracted COVID-19 and was therefore immune for at least seven months, as first reported by Forum News Service.

Experts dispute, however, that people previously infected with the novel coronavirus are entirely immune, as the data is not yet definitiveOther Sanford executives sent an email to employees Friday recommending mask wearing and contradicting Krabbenhoft’s claims.

On the heels of the news, Sanford’s board of trustees and Krabbenhoft have now “mutually agreed to part ways,” according to the release. The turnover comes at an acutely crucial time for the major Midwest health system, as it signed a letter of intent last month to merge with Salt Lake City-based Intermountain Healthcare.

If the deal closes, the two would operate 70 hospitals and 435 clinics — many of which will be located in rural communities across the country — and insure 1.1 million people. The merger would form one of the nation’s largest nonprofit health systems with more than $13 billion in combined annual revenue. It’s expected to close in 2021, pending regulatory approvals.

While Intermountain CEO Marc Harrison is slated to lead the combined organization, Krabbenhoft was poised to serve as president emeritus. It’s unclear what the plans are now after Krabbenhoft’s exit.

Sanford, which operates 46 hospitals in 26 states, did not reply to requests for comment by time of publication.

Outsourcing A Hospital Turnaround And The Team Involved

Outsourcing A Hospital Turnaround and The Team Involved

Outsourcing A Hospital Turnaround and The Team Involved - HealthTechS3

Hospitals are constantly faced with challenges that require them to reassess how they deliver care to their communities.  Continuous improvement is necessary as expense inflation consistently outpaces reimbursement gains.  However, more fundamental issues threaten hospital fiscal viability such as payor mix deterioration, population or market share declines, and utilization changes. Amplify this environment with a difficult EMR installation and a “perfect storm” creates a fiscal crisis that necessitates a turnaround.

If covenants are breached, bond agreements often require an external and independent consulting firm that is engaged to help create and oversee the implementation of a turnaround plan.  Otherwise, a CEO must make a value judgment on whether to outsource the turnaround balancing cost considerations with an honest assessment of (1) their management team’s bandwidth, and (2) ability to prepare and execute a turnaround.

There are multiple models for outsourcing a turnaround.  In a complete outsourcing, an engagement letter with the “performance improvement” consulting firm would include an assessment phase and the preparation of a comprehensive plan that covers all areas of operations followed by implementation support services.  The firm may require an on-site presence of one year or more to assess, validate, and assist in the implementation of recommended interventions.  This can be effective, but the fees can easily reach seven figures even for modest community hospitals.  In addition, even in a complete outsourcing there is still a major demand on the time of senior leadership.  As a result, management sometimes chooses to limit the scope of a performance improvement engagement, which results in a partial outsource.  The limitation may be to only outsource the plan development in the form of a report.  This would detail the operational interventions and the implementation steps, but it would leave the heavy lifting of implementation to existing leadership.   Alternatively, the scope may be limited by excluding certain areas of review.  While there may be valid reasons for the latter approach, limiting the areas of review can be counterproductive to a turnaround plan because many issues are systemic such as patient throughput or revenue cycle.  Further, restricting certain areas for review may create the appearance of “untouchables” or “sacred cows,” which should be avoided in a turnaround.

While the CEO should always be the ultimate leader of the turnaround, the CFO is indispensable in the process whether it is fully or partially outsourced or done completely in-house.  These abilities are not always in the CFO’s skill set; some executives are most effective in a steady-state as opposed to a turnaround environment. The CEO will be relying on the CFO to demonstrate the following traits, which require a large degree of emotional intelligence:

  • Delegate some responsibility to their lieutenants but communicate the financial imperative and manage overall execution of the turnaround
  • Appropriately raise the alarm when progress is not being made. Too much alarm can be seen as crying wolf and too little can add to complacency.
  • Do not be averse to confrontation but do not create it where it is not necessary. Only use the CEO for those most difficult situations where it cannot be avoided to ensure execution remains on point.

Human nature dictates that self-interest may compromise the CFO’s objectivity.  There will be times when the best interest of the organization and the individual are in conflict.  If the incumbent CFO is not up to the task, replacing them with an interim CFO with turnaround experience is a better option.

An experienced interim CFO in a turnaround situation has several advantages.   First, it can afford the CEO the opportunity to underscore the urgency of the situation by making an example. The experienced interim CFO understands their primary role is to be a key asset in the execution of the turnaround.   They are not there to make friends but to influence people (although the best ones do both).  Because they are not angling for promotions or favor for future consideration from the board, they are apolitical, and their intentions are more transparent.  Having been through turnarounds before, they possess the tools to assist the CEO and the board navigates the ups and downs.  Perhaps most importantly, the interim CFO is in the best position to tell the CEO and the board things they may not want to hear such as the need to give up independence or consult bankruptcy counsel if the situation warrants.

Obviously, it is necessary that the hospital must continue to operate safely, securely, and legally during a turnaround.  This can be a difficult balancing act, not just for the CFO but for all senior management.  The CFO must continue to safeguard the assets of the organization.  Likewise, other members of senior management must push back if a turnaround plan may imperil patients, visitors or staff, or violate the law.  Consequently, it may be beneficial to bring in other interim C-Suite leaders who are able to effectively manage the multiple critical priorities during a turnaround in addition to, or instead of, an interim CFO.  However, this must be carefully weighed against continuity of management and the organization’s ability to attract and retain talent.  Senior management turnover creates stress on the organization and is ultimately a reflection on the CEO.

There is not a one-size-fits-all approach to creating and executing a turnaround plan.  Outsourcing to consulting firms can infuse new ideas and analytical talent, but it is expensive and still often leaves management with the bulk of the responsibilities.  Experienced interim management can add independence and objectivity to create a glidepath for execution.

 

 

 

 

Resilience, dedication, conviction: Hospital CEOs write thank-you notes to staff

https://www.beckershospitalreview.com/hospital-management-administration/resilience-dedication-conviction-hospital-ceos-write-thank-you-notes-to-staff.html?utm_medium=email

Words of appreciation: Thank-you notes from 15 health system CEOs ...

Healthcare workers have been on the front lines of the COVID-19 pandemic, providing care to ill patients and battling the public health crisis from various angles. In honor of these workers, Becker’s asked hospital and health system CEOs to share notes to their staff and team members.

Michael Apkon, MD, PhD
President and CEO
Tufts Medical Center & Floating Hospital for Children (Boston)

At Tufts Medical Center, we see some of the sickest people in Boston. Our teams routinely surround each of these patients with the extraordinary care and services they need to get well.

This pandemic is unprecedented.  I know our staff are balancing the concerns that we all have for our families and friends, our own health, as well as the changes to our lives outside of work at the same time they do everything they can to provide the level of care people have come to trust from our organization. I can tell you that over my 30 years in this industry, I have not seen more dedication, innovation and willingness to help than I have during these past few months, as we fight a largely unknown enemy.

I could not be more proud of our doctors, nurses, technologists, transporters, housekeepers, cooks, public safety officers and all others who have been vital to the care of all of our patients, including those with a COVID-19 diagnosis. I know that people are coming together across our industry in nearly every city and town. Many thanks to each of our team members and to the healthcare workers around our country as well as to their families, who have had to worry day after day about their loved one on the front lines. Please know your partners, mothers, fathers, sister, brother, sons or daughters have played a critical role in saving lives, and we are doing everything we can to keep them safe.

Marna Borgstrom
CEO Yale New Haven (Conn.) Health

During these unprecedented times I welcome the opportunity to reflect on all that our staff at Yale New Haven Health are doing for each other and for our communities. We have a team of more than 27,000 hardworking and talented people to care for communities in Connecticut, New York and Rhode Island. I am truly humbled and honored to work alongside these amazing individuals.

Our staff, like healthcare workers everywhere, are being tasked in seemingly conflicting ways during this pandemic. Not only are they continuing to do their jobs by caring for the sickest patients, but they are also managing extremely challenging issues at home. Children of all ages are home from school, some need to be home-schooled. Businesses are closed, impacting many spouses and other family members. Staff worry that they may not have an adequate amount of protective equipment and supplies while at work.

But Yale New Haven Health staff are strong, they are resilient and most of all they are caring. As we do everything in our power to keep our staff safe, they are doing everything in their power to care for very ill patients in a world where new information is coming in real time and changing rapidly. We all hope and pray that this pandemic will end soon, but until it does, we are all in this together. I have never been more proud to work with this this wonderful Yale New Haven Health team.

Audrey Gregory, PhD, RN
CEO of the Detroit Medical Center

We know that the current situation around COVID-19 is unnerving, and as things continue to change rapidly every day, it can also be overwhelming.

I want to take this opportunity to thank all the front-line staff at every level in our organization and at healthcare facilities all across the country.

I also would like to say thank you to all of the providers, including residents, fellows and advanced practice providers. I recognize the commitment that you have to provide care to our patients. Not only do I want to acknowledge that, I never want to take that for granted. As healthcare workers, this is the time that we courageously stay on the front lines.

Please be safe and do your part to protect each other. If you have any flu-like symptoms such as fever, cough, sore throat, body aches or shortness of breath, please stay home. I know that as healthcare workers we have a tendency to ignore symptoms, and work through them, so that we do not let the team down. This is the time that I implore you not to do so.

Thank you for your commitment and dedication to the patients and families that depend on us during this challenging time.

R. Guy Hudson, MD
CEO of Swedish Health Services (Seattle)

As we come together to fight this unprecedented pandemic, I am continually impressed by the resilience, professionalism and dedication of our community’s healthcare workers, first responders and other providers of essential services. Without their selfless commitment to serving others, we would not be able to weather this crisis.

Though we have yet to see the full costs that COVID-19 will exact on our region, I am confident that our community will continue to come together, support each other and manage through this situation with resolve.

I am grateful to the community’s outpouring of support for healthcare providers on the front lines, including the 13,000 dedicated caregivers at Swedish. It is often in times of crisis that our humanity, resilience and compassion shine brightest.

The pandemic poses the greatest risk to the most vulnerable members of our community. There are hundreds of nonprofits and other organizations that are doing heroic work to help our neighbors who struggle with mental illness, housing instability, food insecurity and other challenges. Their efforts are more critical than ever and need our support.

In this unchartered territory, I find strength in the dedication and conviction of the caregivers I have the privilege to work alongside. Providing care to our community in a time like this is exactly why we chose careers in healthcare. In the face of this pandemic, we will continue to serve the needs of our community, and we will not waver in our commitment to our patients.

To all our Swedish caregivers: I am proud to work with you.

Alan Kaplan, MD
CEO of UW Health (Madison, Wis.)

We find ourselves in an unprecedented time. We are preparing for a global pandemic, an insidious virus, that is already at our doorstep. To do this, the physicians and staff at UW Health are adjusting every aspect of our standard service to care for those who need us now, to prevent the spread of COVID-19 and to save as many lives as possible.

Despite these dire circumstances, I remain optimistic and proud. The faculty and staff at UW Health, from our diligent technicians to our expert physicians and nurses, are all working incredibly hard to ensure we are doing everything in our power to care for the communities we serve. Your early actions and quick flexibility gave our health system the best chance to manage this crisis. I am especially impressed by the ongoing collaboration, because it shows how much we are capable of accomplishing together. This work is highly valued and deeply appreciated, both within our walls and beyond.

I know this is a trying time for everyone in our organization and so many others around the world. Much of our specialty care has been put on hold, clinics have closed, and regular schedules are nonexistent. I appreciate the long hours and commitment it takes to serve patients and the public good in a time like this. For those on the frontlines of COVID-19, know that our entire organization and our community are proud of the work you are doing.

Finally, I hope you all do what you can to stay healthy, refresh and take time for yourself and to be with loved ones however possible during this new and challenging time. Thank you for everything you do. You are a daily inspiration.

Sarah Krevans
President and CEO of Sutter Health (Sacramento, Calif.)

The healthcare profession attracts those who want to make a difference in the lives of others. They all have a higher calling and always rise to the challenges in front of them. This happens every day, but it’s very apparent during this time in our history. There is no part of our organization that is untouched by this public health emergency. And yet, our teams stand tall. They don’t back down. From front-line health workers, to food and nutrition services staff, to information services personnel — they are committed to keeping our communities safe. Words will never be able to adequately thank them for their dedication, their perseverance and their heart, but all of us across our organization are forever grateful.

Jody Lomeo
President and CEO of Kaleida Health (Buffalo, N.Y.)

As we face these historic and challenging times, it is vitally important that we come together and stick together as a community. It’s just as important that we remain unified as the Kaleida Health family.

That said, let me thank everyone for their incredible dedication and teamwork this past week.

This is an unprecedented issue for healthcare providers to have to deal with; yet the response by the organization as a whole is what we have come to expect: nothing short of remarkable and solely focused on taking care of our community.

On behalf of a grateful community, the board of directors and the Kaleida Health leadership team, we thank you all for your incredible dedication these past few weeks. I have said it numerous times this week: You are the true heroes of this pandemic. And while our way of life has been forever changed, one constant that remains the same: the outstanding work that is done by the Kaleida Health team!

A special note of gratitude goes out to all of those who have volunteered to care for COVID-19 patients within their respective hospitals and across the Kaleida Health system. We could not do this without you!

In closing, thanks again. Stay healthy, stay safe.

We remain #KaleidaStrong.

Elizabeth Nabel, MD
President of Brigham Health (Boston)

We face an unprecedented challenge — possibly the greatest we will ever experience in our careers, maybe even our lifetimes. I am inspired by the indomitable dedication, courage and innovative spirit of our medical and scientific community as we navigate through these most trying events. From providers working on the front lines of patient care to investigators racing to discover an effective treatment for COVID-19, we are surrounded by countless demonstrations of commitment, collaboration and compassion. We will get through this together and come out on the other side stronger than ever.

 

 

 

 

EVERY HOSPITAL BOARD NEEDS A CEO SUCCESSION PLAN. HALF ARE FAILING.

https://www.healthleadersmedia.com/strategy/every-hospital-board-needs-ceo-succession-plan-half-are-failing

The organization needs to have a strong sense for who will lead next. That’s ultimately the responsibility of the board, not the incumbent. This article appears in the July/August 2019 edition of HealthLeaders magazine.

The departure of a CEO can severely disrupt an organization’s progress, especially when the leader leaves suddenly without a clear successor. Despite the well-known need for succession planning, an alarming number of healthcare provider organizations are chugging along without a plan in place, just hoping that their top executives stick around for the foreseeable future.

Forty-nine percent of hospital and health system boards lack a formal CEO succession plan, according to the American Hospital Association Trustee Services 2019 national healthcare governance survey report. That leaves them vulnerable to the disruptive gusts of a CEO’s sudden departure, and it can inhibit their ability to pursue longer-term strategies by leaving them overly dependent on one leader’s vision.

The failure of these boards to formalize CEO succession plans is outrageous and unacceptable, says Jamie Orlikoff, president of the Chicago-based healthcare governance and leadership consulting firm Orlikoff & Associates Inc. and board member of St. Charles Health System in Bend, Oregon. “Whatever the reasons are, it’s just a fundamental and inexcusable abrogation of a basic governance responsibility, so I am nothing less than shocked that the figure is almost 50%,” Orlikoff says.

Why Plans Aren’t Made There are typically a few basic reasons why an organization may be slow to finalize a CEO succession plan. Perhaps the current CEO just doesn’t want to talk about it, Orlikoff says. Some executives are more comfortable talking to their families about their own life insurance plans than they are talking to the board about what to do in the event of their sudden departure, he says. Or perhaps it’s the board members who don’t want to talk about it. Orlikoff says at least four board chairpersons for various organizations have told him in the past seven years that they don’t want their current CEOs to leave and that they don’t want to think about succession planning because the recruitment process is too burdensome. Or there could be an unhealthy power dynamic between the CEO and the board, with the CEO asserting control over tasks that should be handled by the board members, Orlikoff says.

What makes the relationship between the CEO and the board so tricky is how it ties together two distinct relationships. On the one hand, the CEO and the board are strategic partners defining and executing a shared vision. On the other, they are an employee and an employer. “Those are two very, very different and very important functions,” Orlikoff says.

“Some boards have great difficulty envisioning the distinction between those two roles.” A board should lean on the CEO as a strategic partner because the CEO is likely to know more about the industry and more about the local market than the board members do, Orlikoff says. But when the board neglects to assert its proper place in the employer-employee relationship, the CEO may be given free rein over a broader scope of issues than is appropriate, and that can impede the CEO succession planning process, he adds.

In other words, while it’s perfectly appropriate for a CEO to groom a potential successor, the board should not defer to the CEO’s selection, and the CEO should not insist that the board do so. How to Fix This The existence or nonexistence of a formal CEO succession plan is often a symptom of whether the relationship between a CEO and the board is healthy, Orlikoff says.

Notably, the task of devising a succession plan is one exercise that can improve that relationship, he adds. While the detailed steps each organization should take will vary from one situation to another, there are two specific items that Orlikoff recommends: 1. Ask about the mundane threat of a bus.

Whether you’re a CEO or board member for an organization without a formal succession plan in place, there’s one straightforward question you can ask to kickstart productive dialogue on the topic: What do we do if our CEO gets hit by a bus tonight? The question is nonthreatening. It doesn’t signal a CEO’s possible intent to resign or retire. It doesn’t suggest the board members are thinking about giving him or her the boot.

It simply asks, as a matter of fact, how the organization will maintain continuity in the event of an unplanned CEO departure, just as parents would speak with their families about life insurance, Orlikoff says. The CEO should tell the board, without any other senior leaders present, whom the CEO would pick to step into the interim CEO role, Orlikoff says. That will inevitably prompt follow-up questions: Would the interim CEO be a good permanent replacement? Which of the requisite skills do they lack? How well do they align with our long-term needs and vision?

The conversations about an unplanned CEO departure will flow naturally into questions about a planned departure. Where are we in the current CEO’s contract cycle? When does the CEO want to retire? What skills and traits will our next CEO need to lead the organization into the future of healthcare?

Conversations about an unplanned departure should begin on the very first day of a new CEO’s contract, Orlikoff says. Conversations about a planned departure should begin at the end of the CEO’s first year, he says. For a CEO with a five-year contract, the board should start asking halfway through contract whether the CEO wishes to renew a contract or leave the organization, and the board should know three years into the five-year contract whether the CEO wants to stay, he says.

Hold executive sessions without the CEO present. An increasing number of hospital and health system boards are routinely listing executive sessions on their meeting agendas, and that’s a good thing, according to the AHA Trustee Services survey. A slight majority, 52%, of all respondents routinely included an executive session in the agenda of every board meeting, according to the survey report. But 26% of system boards, 59% of subsidiary boards, and 48% of freestanding boards still don’t.

Even if a board has an executive session, though, that doesn’t mean members are able to fully discuss the topics in their purview. The survey found that CEOs participate in the entire executive session for a majority, 54%, of all boards. That includes 41% of system boards and 57% for both subsidiary and freestanding boards. That deprives trustees of an opportunity to discuss the CEO in his or her absence and might impede the CEO succession planning process, Orlikoff says.

Related: 4 Steps for Planning CEO Succession Boards should think of their meetings in three stages, Orlikoff says. The first stage includes everyone in the room, including board members, the CEO, senior executives, and invited guests. The second stage is a modified executive session that includes the board members and CEO only, which is where the majority of the meeting should take place. The third stage should be an executive session with the board members only. “Confident, secure CEOs know that their boards need to go into executive session without them present occasionally in order to perform certain governance functions. They encourage it,” Orlikoff says. “Insecure CEOs or those who are attempting to control and manipulate the board are very uncomfortable with executive sessions and don’t want the board going into an executive session.”

It’s Mutually Beneficial While it may be difficult to prompt board members to think about a future under different leadership, CEOs who do so are not only investing in the organization’s long-term success but also signaling that they are the sort of leader willing to make investments in the organization’s long-term success. “When a CEO goes to the board and says, ‘You guys need to do this,’ … it demonstrates an incredibly high degree of confidence.

It also demonstrates an incredibly high degree of commitment to the organization,” Orlikoff says. “It shows that you’re thinking beyond yourself,” he adds. “You’re thinking about the best interests of the organization, that you’re willing to have difficult conversations for the good of the organization.”

“INSECURE CEOS OR THOSE WHO ARE ATTEMPTING TO CONTROL AND MANIPULATE THE BOARD ARE VERY UNCOMFORTABLE WITH EXECUTIVE SESSIONS AND DON’T WANT THE BOARD GOING INTO AN EXECUTIVE SESSION.”

KEY TAKEAWAYS

Not having a formal succession plan may be a symptom of an unhealthy relationship between the CEO and the board.

When CEOs prompt the board to think about who will lead next, it demonstrates self-confidence and commitment to the organization.

 

 

 

U of Iowa Hospitals & Clinics CEO: ‘Everything in healthcare doesn’t need to be done by a hospital CEO’

https://www.beckershospitalreview.com/hospital-management-administration/u-of-iowa-hospitals-clinics-ceo-everything-in-healthcare-doesn-t-need-to-be-done-by-a-hospital-ceo.html

Despite branching out through nearly 60 outpatient clinics, the University of Iowa Hospitals & Clinics in Iowa City — which includes the only comprehensive university medical center in the state — by and large remains a healthcare destination.

As such, demand for inpatient services hasn’t waned, but has kept on par with the surge in outpatient demand that the entire industry is seeing, Suresh Gunasekaran, the CEO of University of Iowa Hospitals & Clinics and associate vice president for the University of Iowa Health Care, told Becker’s Hospital Review.

That’s not to say strategic threats don’t exist. The biggest ones threatening the University of Iowa Hospitals & Clinics are retail medicine providers that cherry-pick services but aren’t able to provide coordinated care, Mr. Gunasekaran said.

“It’s great that today there’s more convenient care being provided by retail providers. The biggest threat, though, is if healthcare consumers start believing that getting disconnected care is worth it,” he said. “We’re in the business of connected care.”

Tackling this challenge will require input from all parties, not just the hospital CEO, he said. Here, Mr. Gunasekaran expands on how University of Iowa Hospitals & Clinics is facing the threat of uncoordinated retail medicine, and answers questions on board oversight and the changing role of the hospital CEO.

 

Question: What do you consider your biggest strategic threat?

Suresh Gunasekaran: Major threats are those healthcare services that don’t believe in team-based care, that focus on cherry-picking a corridor of healthcare without thinking about the health of the whole person.

There’s unmet demand in communities for [accessible healthcare]. If Walmart is willing to offer a clinic, they may be the only clinic for 20 miles. What I’d hope is these kinds of Walmart and CVS providers look at how they partner with players like us. In that sense, we don’t view retail medicine as a threat as much as an opportunity. But when they’re not collaborative, that’s a threat to us. It’s only good if the care is coordinated.

Q: U of Iowa Hospitals & Clinics has its own retail clinics. How do they play into the larger consumerism trend healthcare is seeing?

SG: We’re in our fifth year of offering retail urgent care clinics. We offer a setting that’s lower cost and very competitive with other retail clinics. We’ve seen a lot of uptake and growth within this model, but it’s our ability to say: Hey, urgent care and retail healthcare absolutely have a place, but they need to be connected to our lab in radiology and to our specialists.

The next frontier for us is how to partner with other retail clinics. It’s easy to partner with yourself, but it’s more challenging to make it work with others.

Q: U of Iowa Hospitals & Clinics is a state agency, so your board is really the board of regents of the state of Iowa. Have you faced increased pressure from the board to take up any initiatives?

SG: The board of regents has asked we keep a couple issues front and center. There continues to be inadequate maternal healthcare resources for the young moms of Iowa, with more and more hospitals unable to recruit staff to deliver babies. Data shows maternal death is increasing in Iowa, which is a very, very troubling statistic. So we are bringing the full strength of the University of Iowa together on this. We just got a huge research grant from the federal government to create better models for maternal health across the state.

Mental health is another area, and a huge area of priority for our governor. We are looking at expanding our residency program to rural areas that are underserved for mental health. Other things we’re looking at is the workforce shortage and social determinants of health.

Q: How do you think the CEO role will evolve over the next decade? Will we see more hospital CEOs take stances on bigger public issues?

SG: Hospitals within the healthcare industry have [historically] been very insular. You almost could run your business without worrying about the rest of the system. Now with healthcare reform and greater governmental and employer scrutiny of healthcare costs, folks are asking hospital systems to answer for what’s going on in a broader industry. And of course, CEOs have to embrace that journey.

Are we going to get involved in those multiple different steps? Not just access to care, not just the pricing of care, not just care coordination, not just how to get the community to get engaged in their own health. The CEO of the future has to have a stance on all of these, because it’s impossible to go where we need to go without being involved.

Perhaps the CEO is not that important. At the end of the day when you look at these issues, it’s important that we’re at the table, but the community needs to come first. It’s an opportunity for employers to take the lead. It’s an opportunity for the government to take a lead. Everything in healthcare doesn’t need to be done by a hospital CEO, and in the future, probably isn’t best done by a hospital CEO. We need to be one part of the team.

Q: You’ve been leading the University of Iowa Hospitals & Clinics for a little over a year now. Is there any piece of advice you would go back and give yourself on day one?

SG: Never lose the voice of the patient. I got that at the end of my first year, and I think that beginning with the voice of the patient would’ve been very, very powerful. It’s somewhat impractical that you show up to a new job, and of course, you’re going to meet the people within your organization first. But never forgetting the voice of the patient and being able to hear who you are in their eyes and in their words would have been very powerful [on day one]. But I’m making up for lost time.

 

Moffitt Cancer Center CEO, center director step down; conflicts of interest cited

https://www.beckershospitalreview.com/hospital-executive-moves/moffitt-cancer-center-ceo-center-director-step-down-conflicts-of-interest-cited.html?origin=CEOE&utm_source=CEOE&utm_medium=email

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Tampa, Fla.-based H. Lee Moffitt Cancer Center & Research Institute on Dec. 18 accepted the resignations of President and CEO Alan F. List, MD, and Thomas Sellers, an executive vice president and center director at Moffitt, the cancer center announced.

In a news release, Moffitt said the resignations were due to violations of conflict-of-interest rules through the work the center director and CEO did in China. An internal compliance review led up to the resignations.

“Moffitt initiated an internal review of team members’ collaborations with research institutions in China after the National Institutes of Health warned all its grant recipients of foreign efforts to influence or compromise U.S. researchers,” Moffitt said. “Moffitt found several compliance violations that also prompted separation of four additional researchers.”

Timothy Adams, Moffitt’s board chairman, will become interim CEO and president.

The Tampa Bay Times reports that the compliance violations were primarily associated with cancer center employees’ personal involvement in China’s “Thousand Talents” program, which aims to recruit global researchers and academics. 

Mr. Adams said in the news release: “At Moffitt, we pride ourselves not only on our lifesaving research and world-class patient care, but also on transparency and integrity among all our employees. This was an unfortunate but necessary decision.”

“Going forward, this will not damage the future of our research or the care of our patients. We will continue to be careful stewards of the public money entrusted to us for cancer research. Moffitt is proud to have 7,000 of the finest medical professionals in the world fighting every day to treat and cure cancer. That is what mattered yesterday, and that is what will matter tomorrow,” he added.

Former Florida House Speaker H. Lee Moffitt, the cancer center’s namesake, also addressed the matter, saying in the news release: “This great institution did its job. We listened to the warnings from NIH, conducted a proactive review, and took strong action when it was needed.”

Dr. List, who previously was Moffitt’s executive vice president and physician-in-chief as well as chief of the malignant hematology division, could not immediately be reached by the Times for comment.

Moffitt continues to conduct a review, including examining its research and education partnership with China’s Tianjin Medical University Cancer Institute and Hospital. Moffitt said nothing indicates that the cancer center’s research was compromised or patient care affected.

 

An ex-NFL player became a hospital CEO. Feds questioned his qualifications

https://www.beckershospitalreview.com/hospital-management-administration/an-ex-nfl-player-became-a-hospital-ceo-feds-questioned-his-qualifications.html

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The CEO of North Tampa Behavioral Health did not meet the requirements to lead the Wesley Chapel, Fla.-based psychiatric hospital, according to a report cited by the Tampa Bay Times.

Bryon Coleman Jr., the former CEO of North Tampa Behavioral, is no longer leading the hospital. Instead, he is in another position within Acadia Healthcare, the Franklin, Tenn.-based parent company of North Tampa Behavioral.

In October, lawmakers called on federal officials to look into North Tampa Behavioral after the Tampa Bay Times published an investigative report that found Mr. Coleman had no healthcare experience. The report also raised quality concerns, claiming North Tampa Behavioral boosted revenues by using a loophole in Florida’s mental health law to hold some patients longer than a 72-hour limit. The hospital rejected the claims.

In November, federal inspectors discovered serious problems at the psychiatric hospital, according to the Tampa Bay Times. Inspectors said medical staff hadn’t been held accountable for poor care. Inspectors also found “no evidence” that Mr. Coleman “met the education or experience requirements defined in the position description” for the CEO role. Officials threatened to end the facility’s federal funding if the issues aren’t addressed by Feb. 19.

Mr. Coleman became CEO of Tampa Behavioral Health in 2018. Prior to that, he quarterbacked for the Green Bay Packers practice squad, managed sales for a trucking company and oversaw employee benefits at an insurance firm, according to the Tampa Bay Times.

In a statement to the Tampa Bay Times, a spokesperson from Acadia denied that federal officials threatened to cut public funding from the hospital and said officials didn’t find Mr. Coleman lacked requirements for his job.

Read the full article here.