The chief executive officer and chief financial officer at Bayfront Health St. Petersburg resigned Wednesday, the latest in series of recent changes at the city’s oldest and largest hospital.
John McLain became the hospital’s CEO in July 2017, replacing Kathryn Gillette, who retired at the time. Pamela Modisett, the hospital's now former CFO, held that position for almost two years, according to her LinkedIn profile. She has worked for Community Health Systems, the parent company of the Bayfront Health network of hospitals, for nearly a decade.
Hospital officials were not available for comment, nor was any reason given for the sudden departure of the two top executives.
Hospital spokeswoman Elena Paredes said in a statement that McLain’s resignation would be effective Feb. 28 and that Bayfront Health regional president and CEO Joe Mullany would fill his post until a replacement is appointed.
“John and Joe will work closely to ensure a smooth transition,” the statement said.
Other recent developments have signaled that changes are afoot at the hospital, which has been an important institution in St. Petersburg for generations, providing trauma care and serving many of the city’s low-income residents.
Earlier this month, the medical school at the University of South Florida severed its short-lived partnership with Bayfront Health St. Petersburg. And over the last six months, the hospital has laid off 19 employees, Paredes confirmed. Most of the positions were administrative or clerical, she said. None were bedside clinical positions.
Bayfront Health is a six-hospital network along Florida’s Gulf Coast, spanning from Venice to Brooksville. The Nashville-based Community Health Systems chain is one of the nation's largest owners and operators of hospitals, with 137 of them in 21 states. But it has struggled financially in recent years, posting heavy net losses quarter after quarter and selling dozens of under-performing hospitals from its portfolio. Among them was Bayfront Health Dade City, which was sold last year to AdventHealth.
The company’s stock also has plummeted over the last three years.
CHS purchased Bayfront Health St. Petersburg, once known as Bayfront Medical Center, in 2013 from another hospital chain, Health Management Associates. Just last summer, the hospital ran advertisements highlighting a newly expanded cardiology team, which included two USF Health physicians. Bayfront officials said at the time that the expanding department would only strengthen its relationship with USF Health.
But a USF official told the Tampa Bay Times that the partnership dissolved because CHS “has their own objective of selling off hospitals" and did not share the same commitment to training the next generation of medical professionals.
The hospital hosted a ribbon cutting ceremony last week to celebrate the opening of a recently renovated and expanded Level 2 trauma center connected to its emergency room. This was the first of several phases in a $22 million hospital renovation project.
Last year, Bayfront Health St. Petersburg also renovated its neurology and orthopedic floors, and construction is ongoing to double the footprint of the emergency department with all private rooms. In addition, the chain recently opened a freestanding ER in Pinellas Park.
Over the last year, the hospital faced a Department of Justice investigation related to Bayfront Health’s involvement in Florida’s Low Income Pool program, which is used to reimburse hospitals for the cost of providing care to uninsured residents and is sometimes referred to as "charity care."
The company announced a resolution to the investigation in a September 2018 filing with the U.S. Securities and Exchange Commission, citing a settlement agreement. In the filing, Community Health Systems claims that the "certain conduct of Health Management Associates," the hospital’s former owner, was responsible for the investigation. Nevertheless, CHS made $266 million in payments and interest during the fourth quarter related to the settlement.
In 2017, rumors spread that Bayfront Health St. Petersburg may be up for sale again when its management and the charitable organization that owns a 20 percent stake in the hospital pushed for city approval to separate from each other. City officials decided against the approval.
“The hospital is an important legacy in our community. We have historical agreements that we don’t consider to be a mere footnote,” City Council member Darden Rice said Wednesday, referring to the fact that the city still owns the land under the hospital.
“The city should know what’s happening within the hospital’s governing leadership,” she said. “We shouldn’t be learning about what’s happening by reading about it in the newspaper.”
Rice said she planned to ask council members during their scheduled meeting Thursday to add a last-minute agenda item to hear an update on the leadership changes at Bayfront.
McLain was the CEO for a short time at another hospital in the chain, Venice Regional Bayfront Health. He took that job in February 2016 after federal inspections revealed Venice Regional had serious problems with rodents and sewage. McLain resigned in May of that year, saying he planned to take a hospital job in North Carolina, where he has family.
At the time, he declined to comment on what happened.
On Wednesday, the statement from Paredes, the spokeswoman, praised McLain for his work at Bayfront Health St. Petersburg.
"During John’s tenure, the hospital expanded access points and services to meet community need — recruiting more than 10 new providers, opening new locations for primary care physicians, and overseeing phase one of the hospital’s emergency department expansion," the statement said.
Mullany, the interim CEO, joined Bayfront Health a year ago to oversee the six regional hospitals. He served as president and CEO of the Detroit Medical Center, an eight-hospital academic system in Michigan, for four years.
Mullany is no newcomer to controversy. While in Detroit, he oversaw the hospital system during a state and federal investigation following the publication of a series of stories by the Detroit News exposing complaints over improperly sterilized instruments.
Modisett worked in top-level financial positions at hospitals across the CHS chain, including stops in Arkansas, Tennessee and Illinois before coming to St. Petersburg.
Contact Justine Griffin at [email protected] or (727) 893-8467. Follow @SunBizGriffin.