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July 10--PinnacleHealth's board knew before it voted to merge with Penn State Milton S. Hershey Medical Center that Hershey CEO Dr. Harold Paz likely wouldn't be staying to lead the venture, a board member said today.
The regulatory review process needed to bring the Hershey-PinnacleHealth merger to fruition is expected to take several years, which may have contributed to Paz's decision to leave, said PinnacleHealth board member George Grode.
"Hal had some concerns about whether he could make the multi-year commitment to seeing that through. This would give the opportunity for a new person to come in from the ground floor and make a maximal contribution to its final design and implementation," Grode said.
"So from that point of view, Hal's decision to move on to Aetna at this time may actually serve his successor well, since they'll have the opportunity to begin from the startup," he said.
News that Paz would be leaving the top job at Hershey Medical Center to accept a position with health care insurer Aetna was announced Wednesday.
Hershey and PinnacleHealth, in announcing their plans to merge two weeks ago, had said Paz would serve as CEO of the consolidated system.
But Grode said he knew before the Pinnacle board voted on the consolidation "that there was a possibility Hal would be not in a position to see it through the multi-year period it deemed optimal."
He only learned that Paz was going to Aetna Tuesday, and said he was not at liberty to divulge that sooner.
Paz's wife practices in Princeton, N.J., and their principal residence is in New York, Grode said. That likely weighed in his decision on whether he could make a multi-year commitment to central Pennsylvania, Grode said.
While Paz was "a key participant in the vision" planning the merger, Grode stressed that he was one of many.
"The fact the governance group from Hershey, Pinnacle and Penn State and Mike Young are all still in place and committed to this combination, and the various boards voted enthusiastically as this being in the best interest of central Pennsylvania is an important factor in the determination to continue to go forward," Grode said.
"One person's departure doesn't change the vision or soften the commitment in that regard."
Grode, however, said he was disappointed to see Paz go. He said he thought Paz would make a good team with PinnacleHealth CEO Michael Young, who is slated to serve as president of the consolidated health system.
"I think he (Paz) and Mike Young have very complementary skills -- Hal in the arena of academic medical research and hospital administration, Mike in the arenas of overseeing clinical care and operations. So I was very optimistic they were an outstanding leadership team working together," he said.
It was Paz's health care expertise that landed him the job of executive vice president and chief medical officer at Aetna, said Mark T. Bertolini, chairman, CEO and president of that company.
"Dr. Paz has a clear vision for establishing growth platforms based on integrated care delivery, clinical evidence, training and outcomes-based goals," Bertolini said. "His clinical expertise and leadership will support the ongoing transformation of health care delivery."
The announcement Paz is leaving comes as a surprise, said Stephen Foreman, an associate professor of health care administration at Robert Morris University, who studies hospital mergers.
Of Paz's new job at Aetna, Foreman adds, "I see that as a big-time promotion.
And, he said, Paz's departure could make the Penn State/PinnacleHealth merger easier.
"Usually the best method is for both CEOs to go and bring someone new in," Foreman said. "Although if Paz was instrumental in the merger, it could also create a void."
The state attorney general's office declined to comment on Paz's departure. The department's public protection department reviews hospital mergers.
At the Hospital and Healthsystem Association of Pennsylvania, spokeswoman Julie Kissinger said the organization "was unaware that he was going to be leaving for the reasons given."
"The CEOs at our hospitals would not always advise us in advance depending on agreements they made with a prospective employer," Kissinger added.
Penn State President Eric Barron has said he will conduct a national search for Paz's successor, but did not set a specific timeline.
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