Special Report: 2017's notorious healthcare CEOs include VA head who was fired twice

This year's notorious CEOs hail from the VA, Cleveland Clinic, Molina Healthcare and other well-known healthcare organizations. (DragonImages/iStock)

They are supposed to inspire confidence and set an example for employees and staff to work at the top of their games.

But some healthcare leaders—even those who initially showed promise—fail miserably at this mission, generating bad publicity and tarnishing their reputations, as well as the standing of the organization.

Take for instance Brian Hawkins, who only added to the ongoing woes at the Department of Veterans Affairs. He was fired not once but twice as medical director from the VA Medical Center in the District of Columbia this year.

Or Daniel Neides, M.D., the medical director and chief operating officer of the Cleveland Clinic Wellness Institute, who created a firestorm when he published a column laced with antivaccine rhetoric.

And then there is Trevor Fetter, one of the most well-known healthcare leaders in the country, who stepped down from his longtime role as CEO of Tenet Healthcare after the system lost more than $1 billion last year.

These executives land on our annual “notorious” list not necessarily for criminal behavior, but because they made headlines for less-than-positive reasons.

In this special report, you’ll read about the misdeeds and misadventures of these three healthcare leaders, and seven other executives, who have earned the distinction of being FierceHealthcare’s picks for the most notorious healthcare leaders in 2017. 

Trevor Fetter, former CEO of Tenet Healthcare

Trevor Fetter
Trevor Fetter 

Tenet Healthcare reported a net operating loss of more than $1 billion last year, but that didn’t stop the organization from giving longtime CEO Trevor Fetter a $23 million severance package when he left the system in October.

Fetter had served as CEO of the Dallas-based system—one of the nation’s largest healthcare organizations—for 14 years. Although he is one of the most well-known healthcare leaders in the country and was credited with turning the organization around after a series of crises in 2003, the company was under pressure from its largest shareholder to make a management change in the wake of  recent financial losses.

But even with a new CEO at the helm, 2017 financials don’t look good for the organization. Third-quarter financials indicate a net loss of $366 million, with about $30 million due to lower revenue and higher expenses related to hurricanes Harvey and Irma, and the system announced plans to eliminate 1,300 positions in order to cut expenses by $150 million.

Brian Hawkins, former director of VA hospital in DC

VA logo

Brian Hawkins wasn’t only fired once from the VA hospital in the District of Columbia. He made headlines this year because he was fired twice.

Hawkins, who served as medical director since September 2011, was originally let go from the position in March after an investigation by the Department of Veterans Affairs Office of Inspector General revealed the hospital engaged in practices that put patients at “unnecessary risk.” But he was reinstated while the Merit Systems Protection Board reviewed the case.

VA Secretary David Shulkin fired Hawkins a second time in September due to “his failure to provide effective leadership at the organization.” Shulkin took action under the VA Accountability Act, which President Donald Trump signed into law in June and includes new rules that allow officials at the VA to quickly fire employees for misconduct and protect whistleblowers who expose wrongdoing within the system.

J. Mario Molina, former CEO of Molina Healthcare

J. Mario Molina
J. Mario Molina, M.D.

It’s never easy for a chief executive to be fired by a company’s board, but that scenario was likely even more difficult for J. Mario Molina, M.D.

That’s because Molina and his brother, John—the company’s erstwhile CFO—were ousted from the firm that their own father founded. The California-based managed care company attributed the move to its “disappointing financial performance.”

But Molina, who was an unabashed critic of Republicans’ attempts to repeal the Affordable Care Act, suggested that his outspoken political views played a role. He also took aim at the executives of other major insurers, saying they haven’t followed his lead because they’re “afraid of the [Trump] administration.”

After his ouster, Molina Healthcare’s ex-CEO remained on the company’s board of directors and is buying the assets of 17 of the company’s California-based clinics and rebranding them as the Golden Shore Medical Group.

Daniel Neides, Cleveland Clinic Wellness Institute

Daniel Neides
Daniel Neides, M.D.

Daniel Neides, M.D., medical director and chief operating officer of the Cleveland Clinic Wellness Institute, landed in hot water in January after he implied in a column that dangerous preservatives and ingredients in vaccines may be linked to an increase in cases of autism.

That widely debunked theory, based on a study that was later retracted by a leading medical journal, is still lauded by antivaxxers.

The backlash to the column was fast and furious. Cleveland Clinic tried to distance itself, publishing on its website that it completely supports vaccines to protect people. It also promised disciplinary action against Neides, who apologized for the column, and said it would rethink some of the alternative medicine offerings it sells at the organization’s wellness center and halt them if they didn’t align with evidence-based practices.

Benjamin Chu, former CEO and president of Memorial Hermann Health System

Benjamin Chu
Benjamin Chu, M.D.

The sudden departure of Benjamin Chu, M.D., after one year as president and CEO of the Memorial Hermann Health System, came as a shock.

The not-for-profit health system in Southeast Texas made the announcement about the abrupt leadership change in June but made no mention of the reason of his departure. Instead, the organization said he was leaving the 16-hospital system to “pursue his passion in health and public policy.”

RELATED: The C-suite at Memorial Hermann is starting to look pretty empty as more executives leave Houston system

But Chu’s relationship with the system was reportedly rocky from the start. Although he worked for 11 years at Kaiser Permanente, he had never served as a CEO before and had trouble adjusting to the new role and the culture at the health system.

Sheldon Retchin, former CEO, Wexner Medical Center

Sheldon Retchin, MD
Sheldon Retchin, M.D.

Sheldon Retchin, M.D., stepped down in May after serving as CEO of Ohio State University’s Wexner Medical Center for more than two years. But he was back on OSU’s payroll in short order.

Retchin left the Columbus hospital amid criticism from physicians and academics, who wrote a letter saying they had no confidence in his performance as CEO, Cleveland.com reported. Retchin denied the allegations and said he would take a leave of absence and return to the university to study health policy and teach.

However, the Columbus Dispatch obtained a contract in August that showed Retchin began serving as a senior adviser to the president of health policy in July with a base salary of $500,000. Ohio State also made a $600,000 annual contribution to a retirement plan for Retchin, according to the documents.

A university spokesman told the publication that as a "nationally recognized leader in health policy," Retchin will make key contributions to the university.

Wayne Smith, CEO of Community Health Systems

Wayne Smith

Community Health Systems (CHS), one of the nation’s leading operators of general acute care hospitals, has struggled financially of late, and in response one investor called on the system to fire its CEO, Wayne Smith.

ASL Strategic Value Fund submitted a letter to the board of trustees saying it had reached out to CHS leadership about the financial woes but got no response. ASL said that shareholders have lost half of the money they've invested in the Tennessee-based system since it went public in 2000.

But while shareholders lost money, executives raked in millions. Indeed, Smith earned $350 million over the past 17 years, and other executives earned compensation packages worth more than $500 million, which ASL said is more than the entire current market capitalization of the system.

“Management’s previous missteps have resulted in billions of dollars of shareholder losses, all the while reaping tens of millions of dollars in compensation,” ASL wrote.

Despite the controversy, Smith remains as CHS' CEO and chairman of the board.

Richard Topping, CEO of Cardinal Innovations Healthcare

 
Richard Topping

As of Dec. 1, Richard Topping will no longer be the chief executive of Cardinal Innovations Healthcare, a North Carolina-based managed care company that specializes in behavioral health coverage. But he won’t be stepping down willingly.

In late November, the company’s board of directors voted to oust Topping, who had come under fire from state regulators in recent months because of his salary of more than $600,000.

In fact, the board voted in October to slash his salary to $204,195—a figure that North Carolina’s Office of State Human Resources mandated because it is more in line with what the CEOs of the state’s other regional mental health agencies earn.

Joseph Woodin, Martha's Vineyard Hospital

The sudden, unexplained firing of Martha's Vineyard Hospital CEO Joseph Woodin over the summer caused a stir in the local community.

Woodin had been the Partners Healthcare-affiliated hospital's CEO for about a year when he was fired on June 5, the Cape Cod Times reported. Tim Sweet, chair of the hospital's board, said in an internal memo that Woodin was "stepping down," but Woodin himself said that he was asked to leave without an explanation.

The community came out to demand answers about the firing, and the board acknowledged that "the process caused confusion and distress" among Martha's Vineyard patients, according to the article.

In an August interview with the Boston Globe, Woodin said he was still confused about the firing. The board said he was fired over a differing vision for the hospital, but a still-shocked Woodin said he had never received any concerns from the board prior to his ouster.

Michael Covert, CHI St. Luke’s Health

Michael Covert

The organization still hasn’t explained why Michael Covert, CEO of CHI St. Luke’s Health in Houston, a member of the Catholic Health Initiatives system, handed in his resignation in June.

During his three-year tenure, the system grew from five hospitals to 17, then ran into financial trouble that forced it to lay off more than 450 employees.

Covert admitted in an interview a week prior to submitting his resignation that the system’s fast growth may have contributed to financial woes. Although Covert originally intended to step down in August, he has since agreed to stay on until the organization finds his replacement.

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