CATHOLIC HOSPITALS: CHW Axes Execs in Wake of Losses
"[H]eads are rolling at Catholic Healthcare West," as the hospital system shudders from a staggering $225 million in operating losses for the fiscal year ending next week. Chief Medical Officer and Senior Vice President Kevin Fickenscher resigned last week, as did Dr. Michael Wilson, CEO and president of the money-losing CHW Medical Foundation, the system's physicians group. Chief Financial Officer Carla Carlson saw her position eliminated and will leave Aug. 31. CHW's net losses -- expected to total $82 million -- have been largely traced to the physicians' practice, which posted an operating loss of nearly $40 million last year. The system has also been hamstrung by a lack of market share attributable to its far-flung -- and thinly spread -- empire across California. CHW spokesperson Nancy Cartwright said the system "is trying to shift the focus from the centralized system to the regions, including stronger links to regional medical groups" (Bole, San Francisco Business Times, 6/28 issue).
What Went Wrong?
Dr. Leo van der Reis of the Quincy Foundation for Medical Research Charitable Trust said, "The real mission of taking care of patients and educating people (about medicine) was getting lost in the mania to merge" (Benston, Stockton Record, 6/29). Healthcare consultant Peter Boland had his own theories: "They went on a couple of assumptions. One was that you can capture physicians. The second is that you can control them. You certainly can capture them, but you can't control them. What we are seeing at CHW is massive hemorrhaging on the provider side from a flawed strategy." CHW executives also point to familiar hospital woes -- Medicare cutbacks, "declining revenue from managed care contracts," expensive Y2K fixes and soaring prescription drug and medical supply costs. Consultant Wanda Jones also pointed to "the hard hit that CHW took when [the] MedPartners medical group went bankrupt" (Robertson/Bole, Sacramento Business Journal, 6/28 issue).