New Mountain States CEO will face steep learning curve

Nathan Baker • Aug 17, 2013 at 10:18 PM

Local officials have refused to reveal the identity of the person chosen to take over for Mountain States Health Alliance CEO Dennis Vonderfecht in advance of the official announcement Monday, but most agree the new leader will have big, influential shoes to fill.

“Dennis has provided outstanding leadership to the region as a whole and has transformed health care throughout the area,” East Tennessee State University President Brian Noland said Friday. “The university has always had a strong partnership with Mountain States under him, and I’m confident the new leader will recognize how mutually intertwined and linked our futures are.”

In February, Vonderfecht officially announced his retirement, effective at the end of this year, from the regional health care giant after 23 years at the helm.

“At the time I retire, I’ll be 63 and really want to spend time with my family and I’ve got two grandchildren now to spend time with and hobbies I haven’t had a whole lot of time to spend time on and travel with my wife and do all those types of things,” he said when he made his plans public six months ago.

Vonderfecht was hired in 1990 as Johnson City Medical Center’s CEO, then eight years later was thrust into the role of managing a health care system when the hospital purchased six facilities from Columbia HCA.

Mountain States has since grown to include 13 hospitals — soon to be 14 — and nearly two dozen primary care centers and outpatient offices.

Although industry conditions have led to layoffs and losses of positions through attrition in the past few years, the hospital system employs approximately 9,000 people, making it a major economic engine for Northeast Tennessee and Southwest Virginia.

“In 2011, we did an impact analysis for Mountain States and looked at all the hospitals in the system,” Director of ETSU’s Bureau of Business and Economic Research Jon Smith said. “They’re a really big player all the way up into Virginia, and help provide some consistency in our economy.”

Smith said Mountain States’ $700 million annual revenue brings about $1.4 billion to the local economy and helps to employ 12,500 people through supporting jobs.

He added that the incoming CEO will likely face tough decisions for the system’s future when deciding how to properly deal with the implementation of the Affordable Care Act and the seeming stalemate between federal and state politicians over the increase of Medicaid coverage.

“Part of the Affordable Care Act which hasn’t been instituted yet, so hospitals are between rock and a hard place,” Smith said. “Whoever the new CEO is, they are going to have to address that problem as well as coming to grips with management of 15 hospitals, which would be really challenging for anybody.”

But Mountain States’ board of directors is confident the new leader is a suitable replacement for Vonderfecht.

According to MSHA spokeswoman Teresa Hicks, the board started the succession process three years ago by hiring executive search firms to locate a new CEO.

After a profile was built using traits the board of directors were searching for in a new leader, the firm Witt Keiffer searched the globe for possible matches and narrowed down the field of candidates.

Noland said he was asked by the search consultants to help form the CEO profile from the university’s perspective.

“I had the chance to witness the search process firsthand, and I have every confidence the new CEO will carry forward the initiatives that have already been undertaken and will take the region to new heights,” he said. “This is a unique time for our two organizations as Mountain States brings in new leadership, and we’re searching for a new dean for the College of Medicine. As both of these leaders begin, I believe we’ll be able to plant the seeds deep and grow a rich relationship between us.”

Mountain States will announce the new CEO Monday at a 10 a.m. news conference. The new hire will take over once Vonderfecht officially retires.

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