Cuyahoga County appoints two new MetroHealth trustees

Cuyahoga County commissioners have chosen two new trustees for the county’s MetroHealth System, replacing one trustee at the expiration of his term and filling a vacancy created by a second trustee who resigned at his term’s end. Like many county-owned hospital systems, MetroHealth has struggled financially over the years. The system turned a corner last […]

Cuyahoga County commissioners have chosen two new trustees for the county’s MetroHealth System, replacing one trustee at the expiration of his term and filling a vacancy created by a second trustee who resigned at his term’s end.

Like many county-owned hospital systems, MetroHealth has struggled financially over the years. The system turned a corner last year, ending 2009 with an excess of revenues over expenses of $52.4 million, compared with a mere $641,000 excess in 2008 and a $2.2 million loss in 2007.

Now, the health system is spending nearly $26 million on new medical equipment, refurbishing public spaces like waiting rooms and patient units, building information technology infrastructure and setting up a fund to use during facilities emergencies.

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At the same time, MetroHealth lost its chief operating officer, Angeline Marano, late last month. Marano had been on the job for less than a year. The system appointed Dr. Edward R. Hills, chair of its dentistry department, as interim operating chief.

And the system has been dealing with the fallout from a Cuyahoga County corruption scandal, which touched the health system through its former vice president of construction and facilities who pleaded guilty last year to taking more than $600,000 in bribes over a decade in exchange for inflated construction contracts. MetroHealth trustees approves all of the system’s contracts.

MetroHealth trustee appointments also have a bit of politics about them. Ohio law says the county-owned health system must have five Republican trustees and five Democratic trustees. Then, the county commissioners, who are elected officials, make the appointments.

Leaving the trustee board is Cleveland Heights Democrat Ray Sawyer, a retired partner of Cleveland law firm Thompson Hine LLP who was appointed to the MetroHealth board in 1998. Sawyer’s 6-year term expired March 24.

The commissioners replaced Sawyer with John Moss, a Cleveland Democrat who has served on the MetroHealth Foundation Board for three years, the health system said in an announcement to employees. Moss is a vice president, financial adviser and certified financial manager at investment company Merrill Lynch. He will serve a six-year term.

Commissioner Peter Lawson Jones told the Cleveland Plain Dealer he declined to reappoint Sawyer and chose Moss instead because he wanted to take advantage of a chance to bring “not just new blood — but the kind of individuals who have skills in finance” to the board.

Also leaving the board is Richard Hollington III, president of Cleveland investment firm CapitalWorks LLC. Hollington, a Shaker Heights Republican appointed in 2004, resigned for personal reasons when his term ended in March, MetroHealth said. As chairman of the trustee board’s audit committee, he has been an outspoken proponent of reinvesting in the system.

During the trustees’ January meeting, Hollington — a former banker — challenged his fellow trustees to use the system’s financial breathing room to reinvest in MetroHealth’s facilities so it can continue to meet its mission of “saving lives, restoring health, promoting wellness and providing outstanding, lifelong care accessible to all.”

The commissioners reappointed Terry Monnolly to a new six-year term. Monnolly, a Westlake Republican appointed in 2005, is chairman of the trustee board’s facilities and space committee. Monnolly moved over to assume Hollington’s six-year slot, the Plain Dealer said.

Commissioners also appointed Brian F. Murphy to a one-year term. Murphy, a Hunting Valley Republican, has spent most of his career in the specialty chemical industry in Cleveland, working two years with Harshaw Chemical, eight years with Murphy-Phoenix Co., and two years with JTM Products Co., MetroHealth said. Murphy also is active in start-up investing, helping to form the North Coast Angel Fund, an investment fund focused on Ohio seed-stage technology companies.

, the system reported during its monthly trustee meeting Wednesday afternoon.Last year’s excess included $6.1 million in investment interest and realized investment gains, and a $14.6 million net increase in the market value of investments. In 2008, the health system’s investments lost nearly $17 million in value.

“The campaigns launched in 2008 have transformed MetroHealth into a more efficient operation; in 2010, we will build on those operational successes,” Mark Moran, the health system’s president and chief executive since March 2008, said in a written statement.

MetroHealth had revenues of $710.4 million last year, up 3 percent from $686.4 million in 2008. Operating income (which excludes investment income, and gains or losses on investments) was $31.7 million in 2009, compared with $8.7 million in the prior year.

The system provided $252.8 million in charity care in 2009, $12.6 million more than in 2008.

“This is an extraordinary year and an extraordinary turn, but we have to do better at sustaining our mission,” trustee Richard Hollington, an investment banker, said during the board’s meeting. “We have operated for a long time in deficits… that have not allowed us to reinvest in our facility. We must sustain a level of margin that allows us to reinvest in this institution.”

This year, some of that reinvestment will be supported by MetroHealth’s recent issuance of $75 million in Build America bonds(pdf), which will be used to renew the Metro Life Flight fleet of emergency medical helicopters and to expand its community health network.

“Years of operating losses have constrained reinvestment in MetroHealth,” Moran said in the statement. “Our priority is to renew our facilities and expand services so that we can fulfill the growing needs of our patients.”

Mary Vanac

Mary Vanac is co-founder of MedCity News and serves as its vice president and Ohio bureau chief.

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[…] During their January meeting, MetroHealth trustees announced a dramatic financial turnaround in 2009. The Cuyahoga County-owned hospital ended last year with an excess of revenues over expenses of $52.4 million (including unrealized investment gains), compared with a mere $641,000 in 2008. […]

Comment by MetroHealth trustees approve $26 million in capital spending : MedCity News — March 6, 2010 @ 6:07 p.m. 7:51 pm | Edit This

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