CHICAGO Detroit Medical Center chief executive officer Arthur Porter said this week he would resign effective Sept. 30, the second resignation in top management as the financially struggling hospital systems top financial executive, Nickolas Vitale, leaves today.
Porter announced his resignation Wednesday, a day after informing the medical centers board of directors. He will resume his practice as an oncologist at the medical center full time.
That Porter might resign has been the subject of speculation for a time and many are questioning whether his leaving was a condition of the help that state and local government entities have given the hospital in the past month.
Gov. Jennifer Granholm, along with Wayne County and Detroit leaders, worked out an agreement with the medical center that gave a temporary infusion of cash, $50 million, to keep Detroit Receiving and Hutzel Womens hospitals open.
This is not part of the written agreement, Julie Smith, a spokeswoman for the medical center, said of Porters departure.
Vitale said earlier this month that he wanted to continue his work as a financial executive and so he accepted a post at the Bon Secours Cottage Health Services in Gross Pointe, Mich. Porter and Vitale both have said their work is done at the medical center. Porter came to the medical center in 1999 and Vitale has been in his position for two years, though he has worked for the medical center for 18 years. The two have seen medical center through some of its toughest financial troubles, including several downgrades to its bond rating.
We expected it, but I didnt think that it would come this soon, said Craig Kornett, an analyst with Fitch Ratings. I would think that he would stay on until the possible creation of a public hospital authority.
Moodys Investors Service rates the medical center Ba3 with a negative outlook. Standard & Poors has a negative outlook and rates the medical center B, as does Fitch.
We would expect to see a lot of volatility at that rating level, said Standard & Poors analyst Liz Sweeney. A changeover in senior management wouldnt really tend to impact them negatively from a rating perspective.
Kornett had a somewhat different view.
Were disappointed with his departure because hes always been, we felt, a strong leader and has made strong decisions, he said.
Porter said that his being a controversial figure at the medical center was a reason for leaving. However, some have praised Porters pushing to bring the medical centers problems out into the open.
One thing he did do was, he brought a very high profile focus to their public mission costs, said Standard & Poors analyst Sweeney. And [he] brought it to a level of public awareness that nobody I can remember, no other health system, has done before.
Porter petitioned the state and local government leaders for help in securing emergency funds for the medical center. He had announced 1,000 layoffs and threatened to close two of the citys most vital hospitals. The medical center, which operates 10 hospitals, has the primary burden of caring for the city of Detroits indigent population. Porter wanted a long-term solution to the problems.
A task force that was formed to work out a long-term solution to the problem of caring for Detroits poorest residents has recommended that a Detroit Wayne County Health Care Authority be formed. Those factors gave some assurance to ratings analysts after several downgrades on the medical centers outstanding debt.
I think thats [Porters] big contribution, Sweeney said.
