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NorthShore hospital system CEO Neaman to step aside

Mark Neaman will leave his role as president and CEO of NorthShore University HealthSystem in November after 26 years of leading the hospital system.

Neaman, 66, who was at the helm of the health system during its recent, failed 2 1/2-year bid to merge with Advocate Health Care, will become executive chairman of the board through December 2018.

Gerald "J.P." Gallagher, who serves as chief operating officer, will become president and CEO when Neaman steps aside.

The system includes NorthShore Evanston Hospital, NorthShore Glenbrook Hospital, NorthShore Highland Park Hospital and NorthShore Skokie Hospital.

Neaman said the time seemed right to begin his exit from NorthShore. "It's strong financially and we're just sort of at a point of inflection where I think it's best to take on a transition role over the next year-plus and really turn the operations over to a person who's extremely well qualified," Neaman said.

Earlier this year, NorthShore and Advocate Health Care walked away from plans to merge after a federal judge ruled in favor of the Federal Trade Commission, which had challenged the deal. The merger attempt cost NorthShore between $15 million and $20 million, Neaman said. But he said it played no role in his decision to leave.

"We're obviously disappointed with the merger not going through, but NorthShore is in a strong position," Neaman said.

The FTC also challenged, in 2004, the system's earlier merger with Highland Park Hospital. The agency ruled that the merger was anti-competitive, saying it resulted in higher prices. But the FTC allowed the system, then called Evanston Northwestern Healthcare, to keep the hospital as long as it accepted guidelines in negotiating contracts with health insurers.

Gallagher, 46, has been the system's chief operating officer for five years and joined the system in 2002.

The system had $2.05 billion in revenue last year, up from $1.96 billion the year before, according to a financial statement. It had net income, or profit, of $133.6 million last year, up from $90.9 million the year before.

Percy Berger, current chairman of the board of directors, noted in a memo to employees Friday that under Neaman's leadership, "NorthShore has seen 26 consecutive years of growth and profitability."

Berger, who serves as chairman in a voluntary role, will become past chairman of the board when Neaman becomes executive chairman, a new full-time position in the organization.

Neaman, a Lake Forest resident, said the biggest challenge during his tenure as CEO has been dealing with the financing of health care.

A number of area hospital systems including Advocate and Edward-Elmhurst Health have announced cuts recently, citing strains such as more unpaid patient bills, more patients on government insurance programs that don't cover the full costs of care and lower-than desired reimbursement rates from private insurers, among other factors.

lschencker@chicagotribune.com

Twitter @lschencker

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