Ruth Brinkley has resigned as CEO of KentuckyOne Health one week after the struggling hospital system announced that it is selling its hospitals in Louisville to focus on its markets in Lexington and eastern Kentucky.
Brinkley will stay on until September to help her replacement, long-time Louisville hospital administrator Chuck Neumann, transition into the role.
Neumann currently works for KentuckyOne as the interim president of the University of Louisville Hospital. He is leaving that post on July 1, when a joint operating agreement between KentuckyOne and the academic medical center is severed at the behest of both partners.
Neumann takes the helm of KentuckyOne on July 14, the company announced Friday.
Brinkley has served as CEO of KentuckyOne since 2012 when the operating division of Catholic Health Initiatives was created through the merger of Louisville-based Jewish Hospital & St. Mary’s Healthcare and Saint Joseph Health System in Lexington.
“Ruth has led KentuckyOne Health since the very beginning in 2012. As CEO, she developed the statewide structure for a complex organization, and established the vision and purpose for our path forward,” said Richard Schultz, chair of the KentuckyOne Health Board of Directors.
“As we move into the next evolution of our healthcare system, I am excited for her as she also enters the next phase of her life and career. I would like to thank Ruth for her dedication, spirit, and commitment to the employees and physicians of KentuckyOne Health, our board of directors, our communities and, most importantly, our patients.”
Last week KentuckyOne said it is seeking buyers for Jewish Hospital, Frazier Rehab Institute, Sts. Mary & Elizabeth Hospital, Medical Centers Jewish East, South, Southwest and Northeast, Jewish Hospital Shelbyville, Saint Joseph Martin and KentuckyOne Health Medical Group provider practices in Louisville and Martin.
KentuckyOne’s parent organization, CHI, is having its own financial problems. It is in affiliation talks with another Catholic-sponsored giant, Dignity Health in San Francisco.
KentuckyOne has faced intense competition in Louisville from the other big systems, including Norton Healthcare, Baptist Healthcare System and the University of Louisville Hospital, said Larry Prybil, a former health system administrator and current professor at the University of Kentucky in Lexington.
Kentucky is one of CHI’s five-largest markets and also one of the most troubled of the 102-hospital national system.
In its fiscal second-quarter financial report ended Dec. 31, CHI disclosed that in Kentucky its operating earnings before interest, depreciation and amortization had fallen to $17.1 million in the quarter compared wtih $30.5 million in the year-earlier quarter.
CHI cited unfavorable shifts in payer mix plus labor costs that had risen as a percentage of net patient services revenue to 49.4% compared to
44.8% in the same period of the prior fiscal year. That represented $26.2 million more in labor costs for the quarter vs. the year-earlier.
“The Kentucky region is continuing its efforts to address nursing and other staff shortages, which have resulted in increases to overall labor costs, including contract labor costs, and overtime and premium pay,” the report said.