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Cook County Health's next CEO will need to do more than run hospitals

Monday, March 10, 2014
Crain's Chicago Business
by Andrew Wang

The successful tenure of outgoing Cook County Health and Hospitals head Ramanathan Raju and the changing role of the health system mean that the next CEO must have skills far broader than county officials were seeking three years ago, when Dr. Raju was brought on board.

No longer is the job just about running a hospital system in a politically charged environment, itself a monumentally complex task. Some of the changes that Dr. Raju made fall outside of the traditional hospital CEO role. His signature CountyCare program, for example, is the county's first foray into managed care in which the system collects a fixed monthly payment per enrolled Medicaid patient and reaps savings if patients stay healthy and require fewer services.

Another project initiated by Dr. Raju involves offering an HMO plan on the Illinois Health Insurance Marketplace in the fall. To execute that idea, the new CEO would need to be equal parts insurance and hospital executive. To find a person to fill such a multifaceted role, the county may have to look beyond the expected list of local names and public hospital heads from around the country—or it could follow the example of some other public health systems and look outside the world of health care altogether.

“What (Dr. Raju) has done is create a vision and goals that were not there when he was hired,” says Cook County Commissioner Larry Suffredin, who helped establish the health system's independent board in 2008.

After a whirlwind 30 months in Chicago, the former trauma surgeon will return to New York at the end of March to take over its public hospital system. He leaves behind a financially stronger system with a 2012 taxpayer subsidy of $362.9 million, 12 percent lower than the year before he arrived. County officials, including Dr. Raju himself, have said they believe the job will attract a broader pool of applicants this time because the health system's improved state make it a more desirable position.

The hospital board has hired the same search firm that identified Dr. Raju. The headhunters, Chicago-based Quick Leonard Kieffer International, are soliciting input from the board's 11 members on the attributes they want in the next CEO, board Chairman David Carvalho says.

While the board picks the successor, there is little doubt that the process is being closely watched by the county's board of commissioners and its president, Toni Preckwinkle. The CEO has to work closely with the president's office on many matters, not the least of which is the $1.1 billion budget for the system's two hospitals and 17 outpatient clinics. That amount is about a third of the county's total budget in fiscal 2014. Ms. Preckwinkle declines to comment on the search.

At least one candidate could come from the same building. The health board in January named Dr. John Jay Shannon, the system's current No. 2 and chief of clinical integration, interim CEO when Dr. Raju departs.

Between various stints, Dr. Shannon has been with the system for about 15 years. He returned to Cook County a year ago after serving as chief medical officer of Parkland Health and Hospital System, Dallas' public health network. A county health spokeswoman declines to make him available for comment.

Another inside candidate could be Dr. Terry Mason, who was a finalist in 2011 and served as interim CEO for six months before Dr. Raju. A urologist by training, Dr. Mason is chief operating officer of the Cook County Department of Public Health. He declines to comment on the current search.

Parkland completed its own CEO search in February, hiring a former Louisiana state health official and raising the profiles of two unsuccessful candidates. Wright Lassiter III is head of the Alameda Health System, an Oakland, Calif.-based public hospital network, which is starting to examine managed care. An Alameda spokeswoman says Mr. Lassiter has no interest in the Cook County job.

Another named candidate for the Parkland slot, Pete Delgado, was a finalist in 2011 for Cook County's post. Now CEO of Salinas Valley Memorial Healthcare System in Salinas, Calif., Mr. Delgado came from the Los Angeles County-University of Southern California Healthcare Network, where he was CEO; he previously headed systems in Texas and northern California. He could not be reached for comment.

One local CEO, Jose Sanchez of Norwegian American Hospital on Chicago's West Side, did express interest. Before arriving at Norwegian in 2010, Mr. Sanchez was a senior vice president in the New York health system when Dr. Raju was its chief operating officer. The two remain friends.

“I would say that I wouldn't rule out anything,” Mr. Sanchez says. “I would be interested in exploring the possibility if it works for the system and works for me.”

Mr. Carvalho says the search firm will “synthesize” input from the board into a prospectus that it will use to identify candidates. The board expects to have an initial list in May of up to a dozen names, which it will whittle down through interviews to two or three finalists. The board hopes to make a final choice in June, he says.

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