KentuckyOne CEO to step down July 14

Ruth Brinkley

KentuckyOne Health CEO Ruth Brinkley will step down July 14, the health system said Friday, a week after announcing the planned sale of major Louisville assets including Jewish Hospital.

Chuck Neumann, current interim president of University of Louisville Hospital, will serve as the system’s interim president and chief executive. KentuckyOne said Brinkley would remain in an advisory role through mid-September.

Citing “significant challenges” in the health care industry, KentuckyOne Health had said a week earlier that it would sell Jewish Hospital and other Louisville facilities to as yet unknown buyers.

Jewish, a 462-bed hospital, and other KentuckyOne facilities have been plagued by financial struggles. Those difficulties were exacerbated by the system’s pending separation from the University of Louisville Hospital, which, according to Insider’s sources, has financially propped up KentuckyOne’s other facilities.

KentuckyOne Health was created by the merger of the former Jewish Hospital & St. Mary’s HealthCare and Saint Joseph Health System. Almost since its inception, the nonprofit health system struggled financially, racking up losses of about $300 million in fiscal years 2010 to 2014, according to IRS records.

Brinkley said in early 2015 that the nonprofit had to improve its performance by more than $200 million by the end of that year.

Chuck Neumann

Late last year, KentuckyOne and the university said that they were ending their troubled joint operating agreement for University Hospital. The agreement began in 2012, and officials said at the time that the health care industry had changed dramatically since then and that it was best for all involved to dissolve the JOA. The months before the announcement were filled with acrimony, with the university demanding more than $46 million in back payments and KentuckyOne accusing the university of failing to provide details on the allocation of tens of millions of dollars the system paid the university.

Last month, the system said it was cutting 150 jobs to cut costs, and another 100 employees transferred to University of Louisville hospital or took early retirement.

KentuckyOne’s parent, Catholic Health Initiatives, is in merger talks with San Francisco-based Dignity Health, which operates 400 care centers, including hospitals, in 22 states and employs 62,000, including more than 9,000 physicians. CHI operates 102 hospitals in 19 states and employs 95,000, including nearly 4,000 physicians. Combined, the two systems generate annual operating revenue of $27.5 billion.

Dr. Peter Hasselbacher, an observer of the local health care industry, said that Brinkley’s departure did not come as a surprise given KentuckyOne’s struggles and changes in the last few months.

“Ms. Brinkley has been at the helm of KentuckyOne since Catholic Health Initiatives rolled out its statewide network. Matters have not always gone well,” Hasselbacher told Insider via email. “She had some difficult partners in Kentucky to deal with. She inherited a major hospital in Louisville that had already begun to have real troubles. Certainly KentuckyOne, and now even CHI has had frequent turnovers in leadership. Under the theory that the CEO of an organization ultimately is responsible for a company’s success or failure, it is not altogether unexpected to see further executive changes made.

“It has been my understanding that KentuckyOne had to respond to a lot of top-down directives from CHI’s headquarters in Colorado,” Hasselbacher said. “It is possible that a lot of what was done here in Kentucky was not initiated by Ms. Brinkley. It will be of interest to see how far upwards the concept of CEO responsibility goes.”

On Friday, Richard Schultz, chair of KentuckyOne’s board, thanked Brinkley for her “dedication, spirit and commitment.”

“As CEO, she developed the statewide structure for a complex organization, and established the vision and purpose for our path forward,” Schultz said in a press release. “I am excited for her as she also enters the next phase of her life and career.”

Brinkley said in the release that service as the health system’s leader from the beginning was “an honor and privilege” and she would “continue my professional life through mentoring and developing leaders for success in executive management and board of director roles, and other leadership positions.”

Neumann, her successor, has more than 40 years of health care and management experience, the health system said.