In a bloodbath Friday at KentuckyOne Health, the embattled hospital company laid off top executives, including two senior vice presidents and the president of Frazier Rehab Institute.
In an unsigned internal announcement that wasn’t shared publicly, the Kentucky division of financially troubled Catholic Health Initiatives said it was axing leaders to “improve operational efficiency and ensure continued focus on patient care.”
Among the executives ousted were:
▪ Dr. Damian ‘Pat’ Alagia, senior vice president and chief physician executive, who joined the company in 2013.
▪ Randy Napier, president of Frazier Rehab Institute and Southern Indiana Rehab Hospital, whose role was eliminated.
▪ And Michael Spine, senior vice president of strategy and business development, whose position also was cut.
Velinda Block, system chief nursing officer, resigned, and her position will not be filled.
Spokesman David McArthur called the moves a “series of system-level and facility leader transitions.” He said Ruth Brinkley remains CEO and president.
KentuckyOne was formed in 2012 by the merger of Jewish Hospital & St. Mary’s HealthCare and St. Joseph Health System of Lexington, but it has had financial troubles ever since. In February 2014, it announced it was laying off 500 employees in Kentucky. Its Denver-based parent lost $125.9 million in the last quarter of 2015 and has run up billions of dollars of debt.
Alagia confirmed he had been let go but said he enjoyed “a great opportunity to be part of a great system, and I’m not just saying that.” He also said the restructuring made sense for the company. Alagia, an OB-GYN who also has an MBA from Johns Hopkins University, served twice as interim medical director of Jewish Hospital. He is the son of the late Paul Alagia, who founded the former law firm Barnett & Alagia.
KentuckyOne and University of Louisville Hospital have come under attack on several fronts over the past few months.
Last month a jury returned a $21.2 million verdict against the company and its St. Joseph Hospital in London for conspiring with cardiologists to perform unnecessary heart procedures. In one of hundreds of similar lawsuits, the damages were awarded to Kevin Wells, a milk truck driver who said one of the doctors unnecessarily implanted a pacemaker in his chest. The jury found that the hospital and CHI engaged in a conspiracy to aid and abet the doctors to commit an unlawful act.
In June, triggered by a surgeon’s complaint that U of L Hospital was so understaffed that it endangered patients, a state inspection last month found that deficiencies in nursing services specifically endangered three patients. A dozen nurses and doctors also told state inspectors that nursing and other staff shortages put patients at risk, according to the state’s 30-page report released by the company, which said the hospital is safe and has made numerous improvements.
A state inspection team concluded after a follow-up visit in August that the issues had been addressed.
U of L Hospital also received the lowest possible score from the U.S. Centers for Medicare & Medicaid Services in a new rating system for hospitals.
And in May, the Kentucky Supreme Court upheld a $1.45 million punitive damages verdict against KentuckyOne’s St. Joseph Hospital in London for patient dumping in a case in which it twice kicked out an indigent, paraplegic patient in agonizing pain – the second time wheeling him across the street to a motel, leaving him there without a wheelchair and telling him if he came back again the hospital would have him arrested. He died instead.
In the statement about the layoffs and restructuring, which included several transfers, the company said KentuckyOne Health “has made tremendous progress in our first four years. This new structure will provide an even more efficient and collaborative leadership model to ensure ongoing improvements and continued growth.”