Tough times at Parkland
CEO to step down, system hit with more inspections
The end of Dr. Ron Anderson’s 30-year tenure as president and CEO of Parkland Health & Hospital System on Dec. 31 will cap a rough year for the 672-bed public hospital. The announcement that Anderson would be stepping down from his role as CEO—but would remain working there in an undetermined capacity—came as state health inspectors on behalf of the CMS surveyed the Dallas hospital last week for a second time to determine whether the hospital should be terminated from the Medicare program.
The scrutiny by the CMS followed other questions about the hospital’s quality, including those raised by local news accounts and by a $50,000 settlement with the HHS’ inspector general’s office announced in July over alleged violations of the Emergency Medical Treatment and Active Labor Act. (Anderson was instrumental in passing Texas’ anti-patient dumping law in 1985—EMTALA was passed in 1986.)
The CMS will make a decision on its Medicare status by Sept. 30. Anderson and other hospital executives declined to comment through the press office.
The hospital has had other problems. Last week, Parkland’s academic partner, University of Texas Southwestern Medical Center at Dallas, agreed to pay $1.4 million to end a federal investigation of alleged Medicare billing fraud at the hospital in which neither parties admitted to wrongdoing. In August, Parkland reached a settlement with the U.S. attorney’s office in Dallas and the U.S. Drug Enforcement Agency regarding allegations of Parkland employees acting as a coordinated drug ring, using drugs stolen from Parkland pharmacies, according to a Parkland release. Parkland paid a settlement of $80,000, though it had reported the theft and cooperated in a sting operation that led to the arrest of five employees and two others, according to the release.
Meanwhile, Parkland’s chief operating officer, John Haupert, has accepted a position to become president and CEO of Grady Health System, Atlanta, in October.
It’s important now that Parkland management works to keep its providers confident in the hospitals so that staff attrition doesn’t increase, said Heather Kopecky, senior client partner for health services for executive recruiter Korn/Ferry International, in Houston. “Succession of executives can serve as a distraction for an organization and create some worry for what the future holds,” Kopecky said.
The terms of and reasons for Anderson’s job change remained unclear. Parkland’s chairwoman of its board of managers, Dr. Lauren McDonald, said in an interview that discussions about his CEO role began in July before the initial eight-day CMS survey of the hospital that same month, and was tied to Anderson’s original wishes when he signed a five-year contract with the system that ends Dec. 31. She noted that Anderson turns 65 this year—Sept. 6, according to a Parkland spokeswoman.
“The board holds Dr. Anderson in the highest esteem,” McDonald said. “We don’t want him to go anywhere,” she said. That parallels a 2007 announcement that Anderson had signed a contract extending his tenure potentially through this year.
But when asked, McDonald declined to say that the board wanted him to remain as CEO, and Anderson’s note on Facebook indicated that he would have stayed longer as CEO at the board’s request. “I work at the board’s pleasure and respect their decision,” Anderson wrote. McDonald said the hospital will try to design a position that fits his wishes.
W. Stephen Love, president and CEO of the Dallas-Fort Worth Hospital Council, said in a statement that Anderson’s “caring actions have provided excellent medical care for the most vulnerable in our society” and called the board’s decision to replace him “unfortunate.”
Anderson, who started at the hospital in 1976 and has been CEO since 1982, was paid a total compensation package of $885,000, according to a spokeswoman. He is a member of the Kaiser Commission on Medicaid and the Uninsured. In 2005, he was voted No. 1 on Modern Physician’s ranking of the most powerful physician executives and No. 17 on Modern Healthcare’s Most Powerful People in Healthcare list.
Parkland is not alone in having its Medicare status questioned. Methodist Dallas Medical Center was told by the CMS that state inspectors had found “serious deficiencies” making the hospital ineligible for Medicare, according to the CMS. Methodist Dallas is preparing a plan that addresses the issues, according to Methodist Dallas. The hospital’s corrective action plan is due Sept. 12 and its potential termination date is Sept. 23, according to the CMS.