OTTUMWA — Ottumwa Regional Health Center’s CEO has resigned, the second CEO to leave the hospital since it was sold in 2010.
Phil Dionne’s resignation became effective Monday, and hospital officials have launched a search for a new leader.
“I believe it was a personal decision to move on,” said RegionalCare Hospital Partners vice president of communications Jeff Atwood.
RegionalCare Hospital Partners, the Tennesse-based corporation that specializes in operating for-profit rural hospitals, named Dionne to the post in June 2011. He had previously served as CEO of Heartland Regional Medical Center in Marion, Ill., and has more than 30 years in hospital leadership positions.
Before Dionne took the helm, David Kreye was the hospital’s CEO, starting in summer 2010 after CEO Tom Siemers resigned shortly after the sale.
Moving forward, looking for new CEO
For now, an interim CEO is in place: Phil Noel. Noel has more than two decades of experience in leading hospitals, said the hospital board’s president, Dr. Ted Haas. For the last decade, Noel was the chief operating officer for the Baptist Health System in San Antonio, Texas.
“We’re confident that Phil Noel is going to move forward on issues that we have and not just watch us, if you will,” Haas said. “He’s here to work with us and help us with issues.”
But there is still a national search for a permanent CEO, Atwood said.
“I think as time goes on, the skills or leadership style that one looks for changes, and obviously health care is tremendously dynamic,” Haas said. “One thing we at the board level are clearly looking at is some long-term stability ... but I don’t think that means there’s a problem, it’s just reflecting all the changes going on in health care.”
Fast turnover in administration is not ideal, Atwood said, but it also won’t destroy the hospital’s day-to-day functions.
“Ideally, you find somebody that has a little more longevity, but there’s going to be situations where there is change like this,” he said.
The constants at the hospital — the board and the medical staff — mean the community won’t see a blip in their medical care, he said.
“For the majority of people in the community, this will be an invisible change,” he said.
The board and hospital’s goal, Haas said, is to continue quality health care close to home.
“Honest to goodness, that is our goal,” he said. “We want to consistently and reliably do that and have people be able to count on that.”
Why was it sold in the first place?
It’s difficult for independent hospitals to survive, Haas said.
“We needed access to capital to make the improvements in the facility and in the technology at a faster rate than we could do on our own as an individual hospital,” he said.
Since the sale, the hospital has undergone a lot of physical changes: a renovated emergency room, updated Intensive Care Unit, new medical offices north of the hospital, a new CAT scanner, new equipment, two new ambulances and more.
But, Haas clarified, the hospital is not for sale as rumors suggest.
“The hospital is not for sale, end of discussion,” he said.
The group of internal medicine and family practice health professionals who were associated with Iowa Health System (now UnityPoint Health) are now associated with Mercy Medical Center. This does not, in turn, make ORHC a Mercy affiliate.
Balancing recruitment with layoffs
“One of the keys going forward is to continue expansion of the medical staff,” Atwood said. “We’re backfilling some of the primary care base. For years there wasn’t active primary care; folks had to leave town for primary care. These last few years, we had to rebuild that primary care base so folks can stay in town.”
When RegionalCare took over, the hospital had 760 employees, he said. Today, the hospital has 675 employees.
Also in the last three years, 31 physicians and mid-level providers have been recruited and 10 have left.
Not all of those who left were laid off, though, he said. Some retired and some resigned.
“The reason we have less employees is because we’re getting paid less to provide care,” he said. “When sequestration came and with Medicare and Medicaid cuts, reimbursement is declining. Yeah, we have fewer staff, but there again we’re getting paid less money to take care of sicker people.”
When RegionalCare purchased the hospital, he said, the country was in the throes of an economic recession.
“People had less health insurance or no health insurance, so they were waiting or not receiving the care they should seek, so when they came to the ER they were sicker,” he said. “At the same time, we were paid less money, so there’s inherent pressures on hospitals, on all health care providers, really.”
Ottumwa alone in for-profit status
ORHC is the only for-profit hospital in Iowa, said Iowa Hospital Association senior vice president Perry Meyer. Historically, for-profit hospitals have not been popular in the state. Years ago, Des Moines General Hospital and Davenport Osteopathic Hospital were acquired by other facilities and became not-for-profit.
But nationally, 20 percent of all hospitals are for-profit, he said, “so Iowa is just an exception.”
“Iowa really doesn’t have much history with for-profit hospitals,” he said. “Maybe it’s because the population of the state is not as big, so it tends not to draw as much interest.”
Another barrier to for-profits moving in could be Iowa’s “Certificate of Need” law. If a company outside Iowa wants to move in to build a hospital, it must weave through a rigorous process to gain approval.
“That law has kind of kept organizations from outside Iowa coming in and building hospitals,” he said. “You go up to South Dakota, where there is no Certificate of Need law ... and you do see outside organizations come in and build physician- and investor-owned hospitals.
“[Certificate of Need] does tend to be kind of restrictive when it comes to building new facilities, which may be another reason why we don’t have as much for-profit activity here. That certificate of need is kind of a barrier, so to speak, to new facilities being built.”
Meyer doesn’t lean one way or another on the issue, noting that a hospital’s decision to remain not-for-profit or to sell is theirs alone.
“Each community decides how they want to proceed with the governance and ownership of their facility,” he said. “I don’t think you can look at Ottumwa and see anything different from looking at hospitals in Marshalltown or Ames.”
— To follow reporter Chelsea Davis on Twitter, head to twitter.com/chelsealeedavis.