St. Luke’s announces surprise resignation of CEO Michael Covert.
Hospital’s parent firm gives no reason for Covert’s resignation
St. Luke’s Health System CEO Michael Covert has resigned, hospital officials announced Tuesday, the second surprise departure by a Texas Medical Center leader in just over a week.
His resignation is effective Aug. 31.
Covert was not available for comment Tuesday, and Catholic Health Initiatives, the St. Luke’s owner, gave no explanation for the action in an afternoon email informing employees. The email mostly just listed his accomplishments during his nearly three years leading the Houston system.
The announcement was just as unexpected as one last week involving the departure of Memorial Hermann Health System CEO Dr. Benjamin Chu. Memorial Hermann announced a “leadership change,” effective immediately, and gave no new destination for
Chu, 65, who also was not available for comment.
The resignation brings to four the number of Texas Medical Center presidential departures in the last four months, an extraordinary series of events. Dr. Ron DePinho resigned MD Anderson Cancer Center’s presidency under pressure in March, and Dr. Robert Robbins in April left the Texas Medical Center’s top job to become president of the University of Arizona.
Covert, 68, was tapped by CHI as CEO of St. Luke’s in June 2014, half a year after the Colorado-based Catholic chain purchased the Houston system from the Episcopal Diocese of Texas for $1 billion. It was considered a risky venture — the flagship hospital’s facilities were aging and badly in need of renovation, and competitors Houston Methodist and Memorial Hermann led the market.
CHI’s email said that Covert, formerly president and CEO of San Diegobased Palomar Health, was instrumental in expanding the St. Luke’s health network to 17 hospitals, a network of emergency centers and several outpatient specialty clinics after assuming the top job in August 2014.
But the growth and inherent challenges took their toll. Between August 2016 and March 2017, CHI’s Texas division laid off 810 employees and cut its payroll by 1,295 jobs, most at St. Luke’s.
“While we have made significant improvements the past few months, we must continue to institute critical organization changes to further realign our financial performance to sustain and grow our network of care across southeast Texas,” St. Luke’s said in a statement at the time.
More recently, asked by the Chronicle about the cuts, Covert acknowledged, “We grew very quickly.”
But Covert seemed at ease about the challenges in a recent Chronicle interview. He said the transformation always shaped up to be “a 3- to 5-year journey” and expressed confidence the system would turn things around. He gave no hint he could be leaving anytime soon.
Sources usually in the know said the decision had to have been abrupt because it caught them by such surprise.
CHI’s email statement said they expect to name interim leadership within the next two weeks and work with the board of directors to launch a national search.