Departure of Mercy execs raises questions about Mercy Health’s vision
By Jim Doyle, St. Louis Post-Dispatch | |
McClatchy-Tribune Information Services |
Four weeks ago, Combs and his two senior financial deputies were abruptly replaced. No explanation was given. No gracious words were uttered about their achievements.
On Friday, in response to repeated questions from the
"The sole reason for the recent leadership changes in our finance and revenue departments was a difference in management philosophies, and any further speculation is without merit," he said, adding that "the differences should not overshadow the many contributions" made by the Mercy executives "and our appreciation for their years of service."
Britton did not elaborate, and it is unclear whether the strategic vision for Mercy's future walked out the door with Combs. Mercy officials won't say if the three execs resigned or were fired -- or if there was any sort of farewell or severance package for them. Also leaving Mercy were
"It's kind of rare for these things to happen in the not-for-profit world," said
Getzen, who now works as a health care consultant and has served on various boards of directors, said the fact that two of the departing executives oversaw Mercy's billing and collections may point to potential financial issues, such as overly optimistic financial projections.
One thing is clear: The restructuring of Mercy's finance and revenue operations is the latest rough patch in Britton's leadership of the health system, which operates hospitals in
During Britton's five-year tenure as CEO and president, Mercy has grown to become the nation's sixth-largest Catholic health system. The nonprofit, which enjoys an excellent bond rating, recorded nearly
But the Chesterfield-based health system remains a highly secretive and insular organization. And at times, Britton has seriously misjudged not only the views of Mercy's benefactors in the
For decades, Combs was considered a bulwark of the health system's financial success, positioning the organization for a strong future.
In announcing the promotion of Combs on
At that time, Britton praised him for guiding Mercy's investment strategies, including efforts to establish a cancer center, heart facility and expanded emergency department at
In contrast, Mercy issued a terse news release on
"I have no comment. You'll have to speak with the management,"
Combs, Beekman and Chandler also declined to comment.
Mercy's management philosophy shakeup hit the health system at a time when hospitals nationwide are being crimped by reduced government reimbursement rates for
"It's not uncommon to have management turnover of the CFO or the CEO, even when the numbers look good," Pascaris said. "There are times when the board indicates they want a fresh perspective. There can be personality conflicts. ... These are boards that have prominent people. Like in the corporate world, they want fresh blood from time to time. It's not that unusual in this sector."
Mercy has "a very high (bond) rating with a stable outlook," he said, explaining that its more than
But, he added, Mercy has a bit less cash on hand than other health systems with an "Aa3" rating, and it relies on the
Mercy is pursuing a
But the health system has faced recent challenges.
In 2012, Britton miscalculated when he counted on the approval of Mercy's proposed sale of its underperforming hospital in
The
Britton's plan to sell the
The depth of support for Britton on Mercy's board is unclear. He's spending an increased amount of time in
Britton also owns a 5,500-square-foot ranch house in Wildwood.
Complicating matters, the morale of Mercy's workforce may need a shot of adrenaline. Employees have contacted the newspaper with complaints about frozen wages, new policies involving how the health system discourages sick days, and its planned pay cuts for weekend employees. Some employees say their wages are too low for the workers to afford coverage by Mercy's health insurance plan.
"We're the one health system that has not had a recent layoff," Meyer, the Mercy spokeswoman, said.
Mercy employees also complain about the salaries, bonuses and benefits awarded to the nonprofit's executives. For example, Britton's total compensation in fiscal year 2012 totaled
In recent years, Combs and Beekman each had two family members on Mercy's payroll; the combined compensation of their family members from fiscal year 2009 through fiscal year 2012 totaled
Like other health systems, Mercy has a history of clashes with the federal
Hospitals that submit bills to
According to industry experts, health systems at times fudge the diagnosis of certain patients and upgrade their status to an "in-patient hospital admission" as a way to maximize revenue quickly.
Britton and hospital executives elsewhere have voiced concerns about
Adverse rulings in such cases are important: about 36 percent of Mercy's revenue is from
"Those are things that are happening between
Nonetheless, in 2012 Mercy agreed to pay
In 2010, Mercy agreed to pay
According to Mercy's news release regarding the departures of Combs, Beekman and Chandler, executive vice president
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