Days after news of cost-cutting measures being taken at Cleveland-based MetroHealth, the health system announced it has terminated its president and CEO, Airica Steed, EdD, RN.
In an Aug. 5 email to staff, the health system said it is pausing job searches for administrative positions and prioritizing "unnecessary expense" reductions as part of cost cutting measures.
The health system's financial performance "is not where we expected or need it to be," despite positive trends, Christine Alexander-Rager, MD, chief medical officer and interim president and CEO, wrote in a weekly newsletter to staff, which was obtained by cleveland.com. A spokesperson confirmed to the news outlet that the plan does not entail layoffs. Dr. Alexander-Rager had been serving as acting CEO while Dr. Steed, was on medical leave.
Dr. Steed's leave of absence began in July, a spokesperson confirmed to Becker's at the time. MetroHealth's Board of Trustees terminated Dr. Steed from her position Aug. 9, the health system said in a news release, stating the board and Dr. Steed "fundamentally disagree" about the priorities and performance standards necessary to meet the organization's needs. She took the helm in 2022, succeeding Akram Boutros, MD, who was fired after the board alleged he authorized more than $1.9 million in supplemental bonuses for himself without notifying the board.
As part of the cost cutting plan, MetroHealth is reducing all travel expenses, as well as "unnecessary expenses, including purchased and contracted services," Dr. Alexander-Rager wrote. MetroHealth is also prioritizing the hiring of patient-facing roles with strong growth opportunities, and pausing job searches for administrative positions "that are not in the final stages."
"Let me be clear: These are course corrections, not major changes in direction," she said in the Aug. 5 email to staff. "We just need to tighten our belts while we grow revenues and increase access by working smarter," adding the system remains in a strong place financially compared to other safety-net hospitals.
MetroHealth saw total revenue grow from $1.6 billion in 2022 to $1.8 billion in 2023, though it reported a $19.7 million operating loss in 2023. The cost-cutting measures come after a year of significant expenses increases; the system's labor costs grew to $1 billion in 2023, up from $948 million in 2022. Spending on supplies also rose to $354 million, up $70 million from 2022.
The cost-cutting plan was formulated by senior executives prior to Dr. Steed's leave, a MetroHealth spokesperson told Becker's. Last year, the health system was in a similar financial position and took a "series of course corrections that enabled us to hit our targets," the health system said.