Rush University System for Health CEO Dr. Larry Goodman will retire this summer, the academic health system announced late Wednesday.
Dr. Ranga Krishnan, current dean of Rush Medical College and senior vice president of Rush University Medical Center, and Dr. Omar Lateef, the chief medical officer for the system and medical center, and senior vice president of medical affairs for the medical center, will split Goodman’s role. Krishnan will become CEO of the Chicago-based system, a three-hospital network anchored by Rush University Medical Center, and Lateef will become CEO of the medical center.
Goodman has been CEO of Rush University Medical Center since February 2002 and assumed the role of CEO when the system was formed in March 2017. He informed the board about his retirement plans more than a year ago to kick off succession planning, said Goodman, who will turn 69 soon.
“Things are going well at Rush, I am fortunately healthy, I enjoy what I do, and I believe these kinds of transitions take time so I wanted to be purposeful in our succession planning,” Goodman told Modern Healthcare. “Some CEOs can stay too long or get sick and then not perform as well. I have been here my entire career and I care deeply about Rush, so I wanted to make sure I did the correct thing.”
Comparing Rush to other institutions, it would be hard to find another university, flagship hospital and medical system led by a single leader, said Susan Crown, chairman of the system and medical center boards.
“We have grown substantially in all three areas,” she said. “Given our aspirations, it is important for each entity to have strong leadership and focus.”
Rush spearheaded the West Side United program, a coalition of health systems, public institutions, residents and community groups formed in 2017. The group aims to address some of the root causes that have led to a 16-year discrepancy in life expectancy for some West Side residents from those in Chicago’s Loop.
The academic health system has led dozens of informal “listening sessions” throughout the West Side to hear what residents need and learn how to appropriately intervene. Rush and West Side United are trying to spark a recovery through job training, local hiring and purchasing, small business funding and housing development. In the West Side and beyond, Rush looks to expand mental health services—particularly for military veterans— reduce gun violence and increase access to healthy food, among other initiatives.
Rush’s quality experts have been vocal about their criticism of the CMS’ star ratings. The agency’s statistical model unevenly weighted the eight measures in the safety-of-care group, which has skewed star ratings since they were first released in 2016, Rush argues. Quality experts contend that the latent variable modeling used in the calculations isn’t appropriate for measuring clinical outcomes and they are working with the CMS to adjust the formula.
An infrastructure is in place to continue these efforts after his retirement, Goodman said.
“It goes all the way up to the board,” he said.
Modern Healthcare’s sister publication, Crain’s Chicago Business, recently reported that Rush is exploring a merger with Swedish Covenant Health, which operates a one-hospital community health network in Chicago that includes a 150-member physician group and a managed care organization.
Rush nixed a merger with Chicago-based Little Company of Mary Hospital & Health Care Centers last year but has steadily grown its ambulatory network. More outpatient expansion is planned, executives said.
“We want to figure out how to get closer to the home and how to get new services in place outside of the traditional avenues of more clinics and more surgery centers,” said Krishnan, adding that Rush will look to build its own facilities as well as partner with both typical and atypical healthcare companies.
The academic health system is repaying more than $21 million to the federal government for alleged overpayment for inpatient and outpatient rehabilitation claims.
Rush reported $94 million in operating income on revenue of $2.43 billion in 2018, up from $69.5 million in operating income on revenue of $2.27 billion in 2017, according to Modern Healthcare’s financial database. It had a 3.9% operating margin in 2018, up from 3.1% the year prior.
Through the first half of its fiscal 2019, which started July 1, the academic health system posted a 1.9% operating margin and an adjusted $1.5 million operating loss related to early retirement payouts for certain employees. That compared to $47.2 million of adjusted operating income through the first six months of fiscal 2018.