Two high-level executives to leave struggling KentuckyOne Health

Chuck Neumann

Chuck Neumann, the interim chief executive and president of KentuckyOne Health, which is engaged in a difficult process to sell unprofitable Louisville-area assets including Jewish Hospital, will retire at the end of the year.

At the same time, the health system announced Thursday that Charlie Powell, president of the KentuckyOne Medical Group and Sts. Mary & Elizabeth Hospital — one of the assets the health system is trying to sell — will leave to join a national cancer care services provider.

A spokesman for KentuckyOne said that the personnel changes are not related to the negotiations for the sale of the Louisville assets and that sales negotiations are continuing. Until successors are found, the duties of Neumann and Powell will be performed by other executives.

KentuckyOne in May 2017 cited “significant challenges” in the health care industry as its motivation to sell Frazier Rehab Institute; Sts. Mary & Elizabeth Hospital; Medical Centers Jewish East, South, Southwest and Northeast; Jewish Hospital Shelbyville; Saint Joseph Martin; and KentuckyOne Health Medical provider practices in Louisville and Martin.

A week later, Ruth Brinkley, then-CEO of KentuckyOne resigned, with Neumann tapped to succeed her.

In December, the nonprofit health system said that it had entered “exclusive negotiations” to sell the Louisville assets with New York-based hedge fund BlueMountain Capital management. KentuckyOne spokesman David McArthur told Insider Thursday that the negotiations are continuing, “and a final agreement has not yet been reached.”

Jewish Hospital for years has been losing money and until recently had been propped up financially by the profitable University Hospital, which KentuckyOne managed. However, the University Hospital’s management — and profit — have reverted to the University of Louisville, leaving Jewish in a more precarious financial situation and its owner with greater incentives to sell it.

Jewish Hospital and St. Mary’s Healthcare this year have been incurring operating losses of more than $1 million a week.

KentuckyOne and BlueMountain initially had hoped to finalize the negotiations in the middle of this year, but have pushed the deadline to the end of the year. Sources in September had told Insider that the deal was in trouble and that some of the potentially affected parties were preparing for the downtown hospital’s closure. One of the sources said that some local doctors already were trying to pursue other opportunities, both within and outside of Louisville.

However, at the time, Neumann said that negotiations were continuing and that the health system was “not planning for the closure of Jewish Hospital.”

In a news release, Neumann, 70, said Thursday that “after nearly 40 years in health care and leading hospitals and health systems, I have decided that the time has come for me to … retire at the end of 2018. This decision has been a long time in the making.”

“I also want to ensure you that negotiations continue in a positive manner to confirm a new owner and operator for the divesting operations,” he said. “My departure will not impact the progress already underway as we work to identify the new owner.”

Charlie Powell

Neumann also said that Powell “is leaving our organization to accept a new opportunity” to become the chief operating officer for Fort Myers, Fla.-based cancer care provider 21st Century Oncology.

“During a time of significant transition, Charlie has provided steady leadership in both the acute care and medical group/clinic settings,” Neumann said. “I wish Charlie the best of success in his next endeavor.”

Until KentuckyOne finds successors, Jennifer Nolan, president of Flaget Memorial Hospital and Our Lady of Peace, will lead Sts. Mary & Elizabeth Hospital, while Dr. Ron Waldridge, physician executive of the KentuckyOne Health Medical Group and president/chief medical officer of Jewish Hospital, will lead the KYO Medical Group.

At this time of transition for KentuckyOne Health,” Neumann said, “I know there are leaders locally and at Catholic Health Initiatives who will continue to support employees, physicians and patients at the highest level.”