Allegheny Health Network tabs Cleveland Clinic exec as new CEO
The just-appointed CEO of Allegheny Health Network faces the challenge of moving forward a financially strained organization in one of the most competitive markets in the region, experts said Tuesday.
Cynthia Hundorfean, chief administrative officer of The Cleveland Clinic, will replace CEO John Paul in February, the hospital system announced.
As head of a hospital system owned by health insurance giant Highmark Health, Hundorfean will have to balance the opposing pressures of controlling health care costs to please the insurer while increasing hospital revenues to stay afloat, said Stephen Foreman, an associate professor of health care administration at Robert Morris University.
“It really is an unusual situation. … The schizophrenia that that produces has dominated this thing from the beginning,” he said of AHN's Highmark ownership.
Highmark has invested more than $1 billion to prop up Allegheny Health, which competes fiercely with UPMC, the region's dominant system. In the most recent example of the competition, UPMC last week said it plans to build a hospital within a mile of AHN's Jefferson Hospital in the South Hills.
Hundorfean was not available for an interview, according to a Highmark Health spokeswoman.
“The opportunity to join Allegheny Health Network and the Highmark Health family as they tackle the complexities of the health care system to deliver more effective and efficient care for their patients is exciting,” she said in a statement.
Hundorfean has more than 30 years of experience in health care, according to an AHN news release. Her experience includes hospital and physician management, implementation of strategic alliances, joint ventures, and mergers and acquisitions, according to the release.
She'll move from an administrative position overseeing a system with 190 sites and 23,000 employees to one with 200 sites and 17,500 employees, according to AHN. Allegheny Health Network includes eight hospitals, three outpatient health and wellness pavilions and a stand-alone surgery center.
The system, which includes hospitals that formerly made up West Penn Allegheny Health System, has yet to make a profit since its 2013 formation. The system has been working to decrease losses, and has projected losses of $8 million by 2017, down from $37 million in 2014.
Highmark executives have said its strategy depends on AHN attracting more outpatient business, which is becoming more popular among patients but does not pay as well as inpatient services offered at hospitals. Part of that strategy includes funneling patients from the outpatient centers to the system's flagship Allegheny General Hospital in the North Side.
But to do that, the smaller system needs to convince customers to forgo care at UPMC, Foreman said, a system with a powerful reputation as one of the country's top-ranked providers of advanced treatment.
One of Hundorfean's challenges, he said, will be “changing the community perception of the capabilities of AHN versus UPMC.”
William Finn, CEO of Cleveland's Hospice of the Western Reserve, said he believes she is up to the challenge. Hundorfean served on the hospice's board of directors for about 10 years until stepping down about two years ago, Finn said.
Finn described her as a grounded yet creative thinker who helped guide the hospice in a shifting health care market.
“I expect that she'll be someone the community embraces and sees as a thought leader,” he said.
As have all health care providers, Finn said, the hospice has had to work toward providing care more efficiently. The future, he and other experts have said, will require systems to do this and likely will center around payment models that focus on keeping patients healthy rather than reimbursing health systems for procedures and tests.
“Things are changing really fast now, and the level of unpredictability has increased, but we all know that we can't afford the old health care system; we know that risk-based and accountable care is in our future,” Finn said.
Paul, one of AHN's chief architects, will become a special adviser to Highmark Health CEO David Holmberg, AHN said.
“It's been a wonderful few years watching our community grow and being part of the resurgence of AHN,” Paul, 65, told the Tribune-Review.
Paul, a onetime top executive at UPMC, did not say why he is stepping down.
Wes Venteicher is a Tribune-Review Staff Writer. Reach him at 412-380-5676 or firstname.lastname@example.org.