Cleveland-based MetroHealth's board of trustees on Friday fired President and CEO Airica Steed, citing performance issues.
But Steed claims the health system "unlawfully" terminated her contract while she was on approved medical leave.
Steed took the CEO post at MetroHealth in December 2022, becoming the first nurse, first woman and first person of color to serve as the institution’s chief executive, according to the health system's own press release. MetroHealth operates five acute and specialty care hospitals and over 40 ambulatory care centers and has more than 9,000 employees.
Steed, who came over from Sinai Chicago, was hired after the MetroHealth board fired the previous CEO and president, Akram Boutros, M.D., amid allegations that he authorized $2 million in bonuses to himself. Boutros disputes those findings and filed suit.
In a press release issued Friday, MetroHealth's board of trustees said it voted to terminate its at-will employment relationship with Steed, effective immediately.
“It has become clear that the Board and Dr. Steed fundamentally disagree about the priorities and performance standards needed from our CEO for MetroHealth to fulfill its mission,” said E. Harry Walker, M.D., chair of the board of trustees. “We believe Dr. Steed’s performance is not meeting the needs of MetroHealth. As a result, we have lost confidence in her ability to lead the organization going forward and believe it would not be in the best interest of the System for her to continue in her position. Therefore, we are exercising our right to terminate her at-will contract.
"We had high expectations when she arrived in 2022 and are sorry those expectations have not been met," Walker said in a statement.
The board statement continued: "With Dr. Steed’s departure, we are confident we have senior leaders who can step in and guarantee that MetroHealth will continue to be a beacon of excellence for our patients and our community.”
The termination comes less than three weeks after Steed took a temporary medical leave of absence. The health system issued a press release July 26 naming Christine Alexander-Rager, M.D., as the system's acting president and CEO during Steed's medical leave.
Steed’s leave was announced July 23 in an email to the MetroHealth community, the health system said.
But, in a statement issued by her legal team, Steed said she first learned through the media, and not from MetroHealth System directly, that she was "unlawfully terminated" while on approved FMLA leave.
"Dr. Steed, who is the first female and African American CEO of MetroHealth, is extremely disappointed in the actions of MetroHealth’s Board of Trustees and is stunned that the Board has taken action that directly conflicts with prior representations made publicly as well as to Dr. Steed privately," she said through her legal team.
In a Cleveland.com article published July 24, health system representatives called the leave a “temporary situation” that “would not affect [MetroHealth’s] mission or that important work in any way.” William Dube, MetroHealth’s vice president of communications, also wished “Dr. Steed the best as [MetroHealth] awaits her return.”
The following day, the board issued another public statement acknowledging that Steed was expected to return to her role in mid-August, according to Steed's legal team.
"Consistent with her communications with MetroHealth, Steed planned to return to MetroHealth on Friday, August 16. The Board voiced no objection or resistance to this plan," she said in a statement issued to the media.
In the termination letter sent to Steed by MetroHealth dated Aug. 9, of which Fierce Healthcare obtained a copy, Walker said "the Board elected to terminate [Dr. Steed’s] Employment Agreement without cause."
"Since she has been on FMLA Leave, no one at MetroHealth has communicated any performance concerns or other issues to her that would support a termination decision," Steed said through her legal team.
Steed's legal team contends that the board’s decision to terminate her contract is in direct response to Steed engaging in protected activity. "The obvious difference between the official letter sent to Dr. Steed and the public statement issued to the media demonstrates overt animus and an intent to irreparably harm Dr. Steed’s superb reputation and standing in the medical community," Steed's legal team said.
Steed said she has internally voiced concerns about discrimination in the workplace as well as other ethical and legal issues. The former CEO said she is exploring all of her options, "including legal action, to right a wrong that should concern every citizen of this community and medical professionals across the county," according to the statement from her legal representatives.
The health system has not responded to a request for comment on Steed's claims.
According to MetroHealth's own statement issued June 25, under Steed's leadership, the safety-net hospital system has grown into an $2 billion organization. "She has transformed MetroHealth with a People-First Culture that incorporates intentional listening, collaboration and empowerment to best serve caregivers, patients and the community," the health system said.
That statement was issued after the American Academy of Nursing announced Steed among its 2024 fellows. Induction into the academy fellowship recognizes nursing's most accomplished and respected leaders, nationally and internationally.
Steed claims that in her March 1, 2024, performance review, the board stated that she “met or exceeded expectations” for “Financial Management” and had “done [a] commendable job in [her] first year leading [MetroHealth] during a challenging time.”
According to Cleveland.com reporter Julie Washington, in the past two years Steed worked to put reforms in place for how bonuses are approved and to regain the trust of the public and hospital employees following the publicity around Boutros' firing.
MetroHealth went from a positive operating income of $18.1 million in 2022 to an operating loss of $19.7 million in 2023, and the hospital receives partial support from Cuyahoga County, Cleveland.com reported.
Earlier this year, MetroHealth System exceeded its systemwide goals for 2023, which means Steed and other hospital leaders will receive their full salaries, Washington reported for Cleveland.com.
Steed was able to earn her entire salary, the hospital system said. That includes the $900,000 guaranteed portion and a performance-based variable compensation award for 2023 of $381,156, the board of directors voted in March.