The chief executive of Children’s Memorial Medical Center resigned Friday, leaving the future of the troubled hospital in doubt at a critical juncture.
The move surprised few staff members at Children’s, which has been abuzz for weeks with rumors about the imminent departure of Jan Jennings, the hospital’s president and CEO since early 1993.
But doctors and nurses throughout Children’s expressed confusion and concern about Jennings’ leave-taking, which raised several questions. Most important, why would a chief executive walk away from an institution in the midst of a major review of its business strategies?
Children’s is deeply enmeshed in such a review, which is due to be finished in several months. Currently, the plan is for Children’s to remain independent, rather than seek a merger partner, according to board Chairman Warren Batts.
Jennings’ absence from a crucial strategy meeting last month, when early findings from the review were presented by consultants APM Inc., was one of the events that inspired heated speculation about his future at Children’s.
Reached by telephone Monday on a cruise ship that had left Key West, Fla., Monday morning on its way to Mexico, Jennings said he had accomplished his major goals at Children’s and felt it was time to move on.
In particular, Jennings referred to his oversight of a painful but financially necessary restructuring at Children’s that eliminated about 400 jobs and $25 million in hospital expenses over the last several years.
“I did what I came to Children’s to do,” he insisted, saying that he recently declined an entreaty by Batts to stay on at the hospital. Jennings said he and his family would return to Pittsburgh, their original home, and he would look for “new challenges.”
Several executive recruiters said, however, that it was unusual for a chief executive to leave an organization at such a sensitive and important time. In addition to evaluating its future, Children’s has just launched a $100 million capital fundraising drive.
That effort is extremely important for the hospital, whose operating losses have mounted dramatically over the last several years, exceeding more than $10 million for the year that ended in August.
Jennings has had a difficult time recently at Children’s, which is the target of a union organizing drive by registered nurses.
This summer, responding to rumors of sexual harassment involving Jennings, the board hired a lawyer to conduct an investigation, Batts said, adding that the investigator found “absolutely no truth to it.”
More recently, allegations of financial misconduct were directed at Jennings. Once again, Batts said, the board hired an investigator, who found no evidence of impropriety.
As the board explored these matters, the hospital’s management concedes, a communications vacuum developed within Children’s.
“No one had any idea what was going on; we were all very disturbed by the uncertainty,” said Lynn Heald, a nurse. “Everyone is feeling relieved now. At least we can pick up and move on.”
Patrick Magoon, chief strategic officer, has been named acting CEO, and a national search for a new president will begin immediately, Batts said.
