North Ottawa CEO Search Could Take A Year

May 24, 2002
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GRAND HAVEN — Planning for the future may keep North Ottawa Community Health System from bringing a new chief executive on board for some time.

Health system trustees are presently focused on formulating a new long-term strategic plan, an effort that's been given a slightly higher priority than finding a successor to former President and Chief Executive Officer Mike Funk, said Ron Zoet, North Ottawa's new board chairman.

By first working through the strategic planning process, the North Ottawa Board of Trustees can create a vision for the future and then conduct a search for a new CEO who best fits and can carry out that vision, Zoet said.

Developing a new long-term plan, a process that's been ongoing for several months, is "running a little bit ahead" of hiring a new CEO on the priority list, Zoet said.

"Right now, we're sitting back and taking a deep breath and saying, 'Where are we going when this person gets here?'" he said. "If we can't identify what we're looking for, it's very difficult to find it."

Funk resigned abruptly in March after serving four years as president and chief executive officer when trustees decided that, going forward, the health system needed a CEO with a "skill set" that was different from the "fix-it" skills that made Funk the right person for the job in 1998. At that point, North Ottawa was suffering deep financial losses that threatened its survival.

Work on searching for a new CEO is "not down the road very far at all," Zoet said. The board does not have a specific timeline for completing the planning process or a CEO search, the latter of which might not even occur by the end of this year, said Zoet.

"I'd rather do it right than do it fast," he said. "We have time to be visionary and we ought to use that time if we're going to serve the community in the best possible way we can."

Zoet assumed the chairmanship of North Ottawa's board earlier this month following the resignation of former Chairman Ted Poulton, who cited new business opportunities that require a significant time commitment that left him unable to devote the attention needed to the health system.

Zoet has served on the North Ottawa Board since 1995, most recently as treasurer. He works full-time as the director of financial development for the American Red Cross serving Muskegon, Oceana and Newaygo counties.

The strength of North Ottawa's management team, led by interim CEO Michael Payne, who previously served as vice president of operations, provides trustees the luxury of taking a slow, deliberate approach to the strategic planning process and subsequent CEO search, Zoet said.

North Ottawa Community Health System is one of the smallest health systems in West Michigan. It consists of an 83-bed acute-care hospital, a nursing home, a hospice, an in-home medical equipment and nursing unit, a pharmacy, an urgent-care clinic, and the Harbor Dunes Health Center owned jointly with Horizon Medical, a group of local physicians.

The health system recorded revenues of $43.7 million, with a 2 percent operating margin, or $989,206, for the most recent fiscal year that ended June 30. That's far better than the $3 million loss North Ottawa experienced just three years earlier, which led to the elimination of 19 percent of the health system's workforce.

As trustees ponder the health system's future in an increasingly competitive market, they have the opportunity to position North Ottawa as a convenient care provider that people may prefer over larger, regional hospitals and health systems, said Lody Zwarensteyn, president of the health-care planning agency Alliance for Health in Grand Rapids.

Small health-care organizations have the ability to react much faster to market forces, Zwarensteyn said. If they can demonstrate an advantage on cost, quality, access and patient convenience over much larger competitors, they can "reap significant benefits in today's marketplace" and carve out a strong role for themselves, he said.

"North Ottawa has an opportunity to re-tool to maintain and enhance its base or to stand back and see that base erode, because the others are certainly not standing idle," Zwarensteyn said. "If they can re-tool where they improve patient service and improve patient care, they have a great opportunity for not only maintaining their role in the marketplace but enhancing it."      

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