AU Health restructures amid $24M loss

Facing a $24 million fiscal year loss, the board of Augusta University Health System on Thursday approved a restructuring plan that merges the leadership of the health system and its largest single entity – AU Medical Center – into a single position.

The board's bylaw revisions, which take effect beginning Friday, will remove the AU Health System CEO title from AU President Brooks Keel and place it with interim AU Medical Center CEO Philip Coule, who was appointed to the position earlier this week following the abrupt departure of Lee Ann Liska.

The new health system CEO job also will encompass the duties of the university's Executive Vice President for Health Affairs position, one of the titles held by Liska.

Keel has served as university president and health system CEO since joining the university in 2015. The structure was created by his predecessor, Dr. Ricardo Azziz, to better align the health system with the university's academic and research missions.

Under the unanimously approved bylaw revisions, Keel would retain hiring and firing authority over the combined CEO position, as well as have a vote on the health system's board.

University System of Georgia Chancellor Steve Wrigley, an AU Health System board member, said the academic medical enterprise has become too complicated for a single person to oversee.

"Dr. Keel has two full time jobs right now, and it's almost impossible for anybody to do that," Wrigley said. "This system has grown and changed and became a lot more complex in the past few years, so I think this move makes sense in terms of strengthening the organization going forward."

The new health system CEO position would be accountable for not only for the 478-bed AU Medical Center, but for the health system's multiple ambulatory care centers in Columbia County and south Augusta, its state correctional health care operations, the Roosevelt Warm Springs hospital in Warm Springs, Ga., and its proposed Columbia County hospital.

Another bylaw revision allowed the health system board chairman to be drawn from the board's four Board of Regents appointees. Regent Jim Hull was appointed the board's chairman Thursday.

"I do look forward to trying to contribute to this board, and I'm very excited about what can be accomplished," Hull said.

The health system is projected to end its fiscal year on June 30 with total operating revenue of $747.9 million and expenses of $764.5 million, a net operating loss of $16.6 million, based on preliminary figures through April 30. The financial report was approved without discussion, but on June 7 – a day after Liska's removal as AU Medical Center CEO – Keel reminded university employees they were obligated to "carry out our mission in a fiscally responsible manner."

This week AU announced it would close its 33-year-old daycare operation, which has operated at a loss for more than four years, university officials said.

During Thursday's meeting, Keel said "streamlining our leadership structure will provide additional clarity and accountability."

"We feel very strongly that our leadership structure needs to evolve to reflect this new reality, since AU Health is much larger and more complex than a standalone medical center," he said.

Minus nonrecurring expenses, the health system's preliminary loss through April 30 was projected at $18.3 million. Its net loss is $24.4 million.

The health system's largest single expense item – salary and wages – were $315.4 million through April 30, a 5.3 percent increase from the same period in 2018. Total medical and surgical supply expenses were up 16 percent to $169 million. Net patient revenue increased 6 percent to $629.1 million.