Excela's top 2 executives are out, effective immediately

Excela Health System’s two top executives, CEO Robert Rogalski and COO Mike Busch, will step down immediately as the Westmoreland County hospital system seeks “fresh perspectives,” board chair Teresa Petrick said Friday.

Petrick announced the unexpected personnel changes in an email.

“We have been privileged to have Bob and Mike at the helm of our health system at a pivotal time in our development as a system and a regional health care provider. Given the rate of change in health care over this period, it’s quite remarkable to have retained senior executives for that length of time, and we are grateful for their commitment and drive to succeed,” Petrick said.

Rogalski, 54, of Aspinwall, an attorney who previously worked for UPMC, joined Excela’s board of trustees in 2009 and was appointed CEO that same year.

Neither Petrick, who served stints as president of both UPMC Passavant and UPMC St. Margaret before joining AAA East Central as senior vice president, nor Rogalski, immediately returned calls for comment.

John Sphon, 61, chief executive for MedCare Equipment Co., will serve as acting chief executive while the board launches an executive search for a new leader, Petrick said. Excela Health is the founding partner of Medcare. Sphon has a 35-year history with the health system, she said.

IRS filings from the 2017 fiscal year, the most recent filings publicly available online, showed Rogalski collected $618,629 that year from Excela and its associated holdings, while Busch was paid $416,081.

The personnel changes come as the 15-year-old health system — which includes Frick, Latrobe and Westmoreland hospitals and various outpatient facilities and physician practices in Westmoreland County — wrestles with financial challenges in a rapidly changing health care environment.

Just one year ago, Excela relied on investment earnings of $17.5 million to offset a $1.8 million operating loss for the first six months of its fiscal year.

Nonetheless, in an interview in February, Rogalski told the Tribune-Review Excela was well positioned to move into the future.

“The chassis here is built on primary care and population health with an emphasis on value,” he said.

The strength of that chassis has been tested as first UPMC — with its UPMC East in Monroeville — and then AHN — with its outpatient facility in Hempfield and a micro hospital under construction just outside of Jeannette — began aggressively moving into Excela territory.

The announcement in December 2017 that AHN was poised to build a small hospital and cancer center in Hempfield was met with bitter opposition from Excela. Excela went to court last summer in an unsuccessful bid to stop construction of the facility now nearing completion on Route 30 near Jeannette.

More recently, Rogalski minimized the threat the facility posed to Excela.

“A micro hospital is not going to provide a safety net,” he said, adding that Excela will continue to provide services such as its costly, but much-needed, inpatient behavioral health unit.