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MedWest leadership shuffle gives hospitals more autonomy

Concerns among Jackson County doctors that Harris Regional Hospital is not thriving as it should under a partnership with Haywood Regional Medical Center has prompted a change in top leadership.

Harris once more has its own CEO, and Haywood will be under its own CEO. This marks a step back from the shared management structure the hospitals were moving toward.

“Right now, it is clear that we need to have two very strong managers focusing on their specific campuses,” said Fred Alexander, chair of the MedWest Board of Directors, the umbrella partnership for the Haywood, Jackson and Swain county hospitals.

Until last week, Mike Poore served as the CEO of all three hospitals as well as the umbrella partnership of MedWest. Poore has now been pulled back to his former role of being over Haywood’s hospital only. WestCare, which includes both Harris and Swain County Hospital, will have its own CEO in Steve Heatherly, who was second in command at WestCare prior to the partnership and since then has served the head of the MedWest Physician Network, which employs more than 80 doctors.

Poore said he wants whatever is in the best interest of all three hospitals, even if that means a change in his job title.

“We have to be laser focused on giving the absolute best care at each of our hospitals,” Poore said.

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When Harris and Haywood hospitals formed a partnership two years ago, the CEOs of both applied for the top job over the new MedWest entity. While Haywood was seen as pulling for Poore, Jackson was seen as pulling for its own CEO at the time, Mark Leonard. When Leonard did not get the top spot, he left rather than staying on in some other capacity.

Now, Heatherly may be the next best thing. He has been at Harris since 1997, working his way up to CFO, chief operating officer and executive vice-president. Heatherly got his MBA from Western Carolina University.

Alexander said several physicians recently brought their concerns about the direction of Harris to the hospital’s board and management team.

“I think their sincere motivation is to try to see the hospital operating more smoothly,” Alexander said. “As a result we felt both hospitals needed to have direct hands-on management. Our whole desire is to resolve any issue that is present.”

And the clock may be ticking. If Jackson’s medical community isn’t satisfied, they could lobby to pull out of the MedWest partnership in 2013.

While dissolving the partnership may not be particularly easy, there was a clause in the contract forming MedWest that allowed for an out after three years — which is coming up next year. But it would take a super majority of MedWest’s board of directors to terminate the partnership. The board has 14 members — with Haywood and WestCare evenly represented with seven members each — and 75 percent would have to vote to dissolve. Barring that, legal arbitration could be an option.


Not uncommon hiccup

In addition to partnering under the MedWest umbrella, the entity also signed a management contract with Carolinas Health System, a network of 30 hospitals under the flagship Carolinas Medical in Charlotte.

Carolinas Health System has been an astute observer in recent years of mergers and partnerships playing out with smaller hospitals across the state. Hiccups like this are not uncommon, according to John Young, vice president for Carolinas HealthCare’s western region.

“We need someone living and breathing and spending all their time on each side,” Young said. “When you have people going back and forth you feel like nobody is getting the full attention of anybody. We decided it was time to make sure we had enough boots on the ground in terms of leadership.”

Neither hospital has a particularly easy row to hoe these days — whether together or alone. Hospitals and doctors have all been impacted by the recession, as consumers cut back on health care spending and insurance companies and Medicare lower their reimbursement rates.

But the financial challenges in Haywood and Jackson have been exacerbated by competition from Mission Hospital, which has been chipping away at market share of the local hospitals in recent years.

“We have lost too many patients out of our marketplace and that is putting financial stress on the entire organization,” Young said. “If we get grow bigger and get better a lot of this stuff will just fall away.”

The MedWest partnership is still relatively new, and there is naturally going to be an adjustment period as hospitals and doctors who used to be independent begin thinking collectively, Young said.

“We probably are moving it back a little bit form the direction we were going, but if that helps both sides be more successful, then it will help MedWest be successful,” Young said.

As the CEO of all three hospitals and MedWest at large, Poore brought a more collective approach that perhaps the hospitals and medical communities weren’t ready for yet.

“We haven’t been meticulous about accounting this widget went to that campus and that widget went to that campus, but we are going to start doing that,” Poore said.

Several administration functions have been consolidated by the partnership. MedWest shares a nutrition department, marketing department and purchasing department, for example.

But medical care and health specialties have not been consolidated, and there are no plans to make patients trek to either-or hospital depending on the type of treatment they need.

“The end game of everything we are trying to do through MedWest and the individual hospitals is to provide local services for local people,” Alexander said.

Alexander pointed out that if the business side of a hospital — namely how good or bad the hospital is faring — always seems to capture headlines, that’s because it is directly related to its mission.

“Most succinctly, if a hospital wants to do good for its community it must do well financially,” Alexander said.

Alexander said the hospitals may return to a single CEO model at some point.

“We don’t see this as a permanent set up, but for the foreseeable future,” Alexander said. “Change is your middle name if you are a hospital these days. In the life cycle for any organization the form has to follow the functions that are at hand.”

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