Brian Bauer, the CEO of Community Health System’s Fort Wayne hospitals, has been fired in the wake of a failed physician effort to find a buyer for the eight hospitals.
The removal is the latest sign of trouble in the most profitable market for CHS which itself has been facing hard financial times.
Bauer was removed Monday as CEO of Lutheran Health Network because “current circumstances put him in an untenable position and he is unable to continue in his leadership role,” CHS Division 1 President of Operations Marty Bonick said in a letter to physicians and employees.
The letter noted that Aaron Garafola, CEO of Lutheran Health Network’s Dupont Hospital, also was no longer in his position.
Bauer’s ouster comes three weeks after Franklin, Tenn.-based CHS rejected a $2.4 billion offer from a buyout group that disgruntled physicians in Fort Wayne had brought forward to buy the profitable CHS division. More than 100 physicians supported the buyout effort.
The CHS board of directors said the offer was at least $1 billion too low and told the physicians not to bring another offer.
But the physicians haven’t given up on their quest. They have been waging a public relations campaign. In an interview last week, Dr. Vince Scavo, who was one of 10 physicians who took the buyout offer to CHS, said CHS neglected Lutheran’s capital and staffing needs for years and had lost the trust of physicians and employees in Fort Wayne.
Scavo said there was no alternative to CHS selling the system.
A CHS spokeswoman could not be reached late Monday to comment on Bauer’s firing. She said in a statement last week that CHS was bullish on Fort Wayne as evidenced by the $500 million, multi-year capital commitment that the system recently made to the division.
The Bauer firing was first reported by Fort Wayne station WANE.
Fort Wayne is struggling CHS’s most profitable division with revenue of about $1.1 billion annually and earnings before interest, taxes, depreciation and amortization of $350 million, according to a recent report by J.P. Morgan.
Fort Wayne notwithstanding, CHS posted a net loss of $1.7 billion in 2016 and is in the process of selling 30 hospitals to reduce a $15 billion mountain of debt.
Bauer has been replaced by Mike Poore, who is a Vice President of Operations for CHS’s Professional Services Corporation, the Bonick letter said.
And healthcare consultant Mike Young has been appointed interim chief operating officer of Lutheran, the letter said.
Young will lead stategic initiatives, including a $500 million capital commitment that CHS recently made to the Fort Wayne operations, the letter said.